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Donald Trump sparked a new wave of global trade unrest on Friday as his administration cleared the way for new tariffs on China and the US president lashed out at Canada, a day after halting talks with his country’s northern neighbor.
The U.S. Trade Representative’s office began an investigation that could point the way to further tariffs from China, an announcement that came just before Trump’s planned departure for high-stakes negotiations in Asia — including a summit with Chinese President Xi Jinping.
The US government said it is investigating whether Beijing has complied with a trade deal struck during Trump’s first term – an investigation that risks increasing tensions between the world’s two largest economies ahead of next Thursday’s US-China summit.
The investigation could allow Trump to impose new tariffs on Chinese imports even if the Supreme Court strikes down duties he imposed on Beijing this year under emergency powers.
The USTR said it would investigate “whether China has fully complied with its obligations… and what action, if any, should be taken in response.”
Trump will arrive in Malaysia this weekend to hold talks with Washington’s allies in the Pacific before heading to Japan on Monday and Korea later in the week.
The trip comes in the wake of his decision to freeze talks with Canada – another major US trading partner – after taking offense at a television advertisement.
On Friday, Trump amplified his accusations that Canada has “long cheated” on tariffs, adding: “Now they, and other countries, can no longer take advantage of the US.”
His decision to abandon trade talks, in response to an advertising campaign by the province of Ottawa, raised alarm about the US president’s unstable approach.
“What we have here is the problem of one man running trade policy without restrictions,” said Edward Alden, a senior fellow at the Council on Foreign Relations think tank.
“He gets annoyed, he says: ‘I’m angry, we don’t talk anymore.’ Nations are not supposed to behave toward each other the way angry couples do.”
Trump’s sudden move into negotiations came after Canadian Prime Minister Mark Carney tried to maintain ties with the White House in recent months.
“We have no control over the United States’ trade policies; we recognize that those policies have fundamentally changed,” Carney told reporters in Ottawa on Friday.
He added that Canadian officials were prepared to build on progress in trade negotiations “when the Americans are ready to have those discussions,” and stressed that Ottawa would focus on “partnerships and opportunities, including with Asia’s economic giants,” in the meantime.
But Kevin Hassett, the director of the White House National Economic Council, said Friday that Canada was “very difficult to negotiate with” and that Trump had grown frustrated with the talks.
The US president announced his plan to abandon Canadian negotiations on Thursday evening, complaining that the ad aired in the US featured the voice of former Republican President Ronald Reagan “speaking negatively about tariffs”.
The Ronald Reagan Presidential Foundation said the Ontario ad “misrepresents” the former president’s audio speech, complaining that the province “did not request or receive permission” to use the comments. The organization added that it was “reviewing its legal options in this matter.”
On Friday, Trump also credited his trade policies with the gains the US stock market has made under his presidency – more than 15 percent year-to-date.
“THE STOCK MARKET IS STRONGER THAN EVER BECAUSE OF RATES!” he posted on his Truth Social network.
Many analysts argue that US stocks only recovered from the blow they suffered in April because Trump reined in his most aggressive pricing plans.
US inflation has also risen in the wake of the tariffs – although less than some economists feared – reaching 3 percent in September, the highest rate since Trump returned to power in January.
Trump has imposed 35 percent tariffs on Canadian goods excluded from the U.S.-Mexico-Canada Free Trade Agreement. He also imposed import duties of up to 50 percent on steel and aluminum, as well as anti-dumping duties and tariffs on softwood lumber.
Mexican President Claudia Sheinbaum said she is closely watching developments between the U.S. and Canada as her administration looks to make progress in its own trade negotiations with Washington.
“We are going to wait,” she said, adding that Mexico was “very far along” in its own trade negotiations with the US.
