U.S. President Donald Trump’s sweeping tariffs on the country’s biggest trading partners have ignited a global trade war that could weaken the economic growth of all parties involved. On March 4, Trump followed through on his threat to impose 25% tariffs on imports from Canada and Mexico and an additional 10% levy on Chin
Canada and China swiftly retaliated. Canadian Prime Minister Justin Trudeau said he would implement a 25% tariff on more than $100 billion of U.S. goods over the next 21 days. “Today the United States launched a trade war against Canada,” he said and called Trump’s decision to target Canada “a very dumb thing to do.”
China countered with up to 15% tariffs on some U.S. agricultural goods, including wheat, corn, beef, and soybeans. It also added 15 American companies, including U.S. defense company Leidos, to its export control list. China has vowed to “fight till the end” after the U.S. doubled tariffs on all Chinese imports from 10% to 20%. Mexico is also preparing retaliatory tariffs. Mexican President Claudia Sheinbaum said she will announce the details on March 9.
U.S. tariffs sent shockwaves through global financial markets. The S&P 500 closed 1.2% down on March 4, while the tech-heavy Nasdaq closed 0.4% lower. South Korea’s benchmark KOSPI fell 0.15%, Japan’s Nikkei 225 dropped 1.19% and Taiwan’s TAIEX slipped 0.7%.
Korean companies with production facilities in Mexico are also on high alert as U.S. tariffs take effect. More than 200 Korean companies, including Samsung Electronics, LG Electronics, and Kia have begun scaling back operations at their Mexican factories while exploring alternative measures.
“Companies have no choice but to rush to Plan B now that 25% tariffs on Mexico have become a reality,” said Jang Sang-Sik, head of the International Trade Research Institute at the Korea International Trade Association (KITA).
Samsung Electronics has begun shifting more home appliance production to its South Carolina plant. LG Electronics is also reducing production at its Mexican plant, limiting output to orders from Latin America.
Hyundai Motor plans to increase production at its Georgia plant, which began operations late last year. Kia, which produced around 120,000 vehicles in Mexico last year, including its flagship K4 midsize sedan, is now looking to diversify its sales channels.
The South Korean government is also stepping in. Acting President Choi Sang-mok said the government has agreed to “establish a working group to address tariff-related concerns and strengthen cooperation in shipbuilding.”
