Stock market crash and rising car prices. What do the media write about the consequences of Trump's tariffs?

On March 4, the duties announced by US President Donald Trump on goods imported from China, Mexico and Canada come into force. What was the reaction to the new tariffs and what, according to the estimates of the foreign press, could be the consequences of a full—scale trade war - in the Izvestia digest

Bloomberg: Duties against Canada, Mexico and China have escalated the global trade war

The United States has imposed tariffs of 25% on all imports from Canada and Mexico and imposed an additional 10% on China. The only exception was Canadian energy resources, which are subject to a 10% duty. Shortly after the entry into force of the US tariffs, Canada intends to impose duties on US goods worth about $ 20 billion. China announced the imposition of tariffs of up to 15% on a number of agricultural products, the blacklisting of a dozen American enterprises and a ban on the sale of their products in China to the Illumina genome sequencing company.

China's retaliatory measures have been restrained compared to the US tariffs. The rates were lower, and the range of affected products was quite targeted. At a regular briefing this afternoon, representatives of the country's Foreign Ministry only repeated that the United States should negotiate with China on the basis of mutual respect. American farmers will be upset that these duties will be added to one of their key markets, but other industries have not been affected by widespread tariffs, at least for now

Chinese stocks regained their losses after falling amid easing concerns about a full-scale trade war. The currency markets reacted calmly to the introduction of tariffs, the Mexican peso declined slightly against the US dollar, while the Canadian dollar remained almost unchanged.

The Economist: Markets collapsed after extreme tariffs took effect

Trump has often declared his love for tariffs, but many investors and company executives assumed he would back down again. A few seconds after Trump's announcement about the tariffs, stock markets collapsed. The S&P 500 index of large American companies ended the day almost 2% lower, which was the biggest drop this year. And the drop would probably have been sharper if it hadn't been for the suspicion that as soon as the damage became apparent, Trump would reverse some of his measures.

If he persists, the tariffs on Canada and Mexico will become the most extreme and most dangerous act of protectionism by an American president in almost a century. They threaten to destroy the trilateral trade relations between America, Canada and Mexico, which have been one of the most successful examples of economic integration in the world, especially in the automotive industry. Some car parts cross American borders seven times before being put into final assembly

Rising costs may force some firms to stop production. According to Trump, tariffs will convince automakers to build factories in the United States, but in reality disruptions will lead to confusing supply chains and rising costs for consumers. The governments of Canada and Mexico have warned that they will hit US goods with their own tariffs. Apparently preparing for retaliation, Trump warned that American farmers should start producing more agricultural products for the domestic market.

CBS news: due to duties, cars may rise in price by $12.2 thousand

The range of additional vehicle costs may be $4-10 thousand, and the cost of manufacturing some electric vehicles that depend on components from China will increase by $12.2 thousand. Rising costs caused by tariffs could lead to a "potential loss of sales" for domestic automakers, as consumers switch to cheaper alternatives — used cars or cars assembled, for example, in Japan.

Automotive supply chains are complex because they include many parts, some of which may cross borders more than once during the assembly process. With tariffs added to the equation, costs could rise rapidly for automakers

The automotive sector will face negative consequences not only due to disruption of supply chains, but also due to expected price increases, which will reduce demand. Jim Farley, CEO of Ford Motor Company, said that a prolonged period of high duties would destroy the company's profits, lead to higher car prices and slow down economic growth. Trump believes that such duties will be a "win" for the American industry, as they will lead to a "huge volume of car production," for example in Michigan.

Global Times: China imposes retaliatory duties on American goods from March 10

The Customs Tariff Commission of the State Council of China announced that an additional 15% tariff will be imposed on imported chicken, wheat, corn and cotton, while a 10% tariff will be imposed on sorghum, soybeans, pork, beef, fruits, vegetables and dairy products.

For these goods, the corresponding duties will be added to the current tariff rates. The current bond policy, as well as the tax reduction and tax exemption policy, will not change, and the latest duties imposed will not be reduced or exempted, according to the statement

On Monday, the U.S. government announced the imposition of an additional 10% tariff on all Chinese goods imported into the United States, citing the problem of fentanyl (a drug that is distributed in the United States. — Ed.) as an excuse. The Customs Tariff Commission said the unilateral duties undermine the multilateral trading system, add to the burden on American businesses and consumers, and harm economic and trade cooperation between China and the United States.

Mexico News Daily: duties force Honda to move production from Mexico to the USA

According to the Reuters news agency, Honda will not produce the next-generation Civic hybrid model in Mexico, as originally planned. Due to the threat of tariffs on goods from Mexico, the Japanese automaker has decided to produce one of its best-selling models, the Civic, in the US state of Indiana. Initially, Honda planned to produce the new Civic model in the Mexican state of Guanajuato, as rising costs hampered production in Indiana and Canada.

Several companies in the automotive sector, including Nissan and Nemak, a leading auto parts manufacturer, have said they are considering moving production in the event of new duties, but Honda's move to the United States will be the first major operational realignment in the industry.

Shinji Aoyama, Honda's chief operating officer, said a 25% tariff on U.S. imports could damage the company in excess of $132.7 million. The tariff blade can cut in both directions. If Mexico or Canada impose retaliatory duties, Honda may face additional cost increases, as it exports about 60,000 vehicles from the United States to Mexico and Canada. The Honda case highlights potential disruptions "in industries that cannot dramatically change production plans in the short term, given the investments and different production lines used for different markets."