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A sprawling business empire built by Hong Kong billionaire Li Ka-shing is caught in the crossfire as the extent of Chinese influence over the Panama Canal is debated.US Secretary of State Marco Rubio said last week it was “unacceptable” for Hong Kong-based companies to control the canal’s entry and exit points, arguing they could shut down transit if Beijing ordered them to.Panama has now announced an audit into the subsidiary of Li’s CK Hutchison Holdings, which manages two of the canal’s five ports. Here’s what you need to know about the Panama port operator and its ties to China:- Who runs the ports? -Hutchison Ports PPC — which also uses the name Panama Ports Company SA — has managed the port of Cristobal on the canal’s Atlantic side and Balboa on the Pacific side since 1997 via a concession from the Panama government.That arrangement was automatically renewed in 2021.Hutchison Ports said last month that it is the “only port operator in the country where the state is a shareholder”, and that it had paid the Panama government $59 million in the past three years. It said its workforce is almost entirely Panamanian.Parent company CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.The company has a hand in running 53 ports in 24 nations, including in Britain, Spain and Australia.- Hong Kong’s ‘Superman’ -CK Hutchison was built from nothing by Li — now Hong Kong’s richest man, nicknamed “Superman” for his business acumen.His company Cheung Kong — named after China’s Yangtze River — thrived in Hong Kong’s property market during the British colonial era and began expanding overseas in the 1980s.In 2015, CK Hutchison was born out of a restructuring. Three years later, Li stepped down as company chairman at age 89 and handed control to his eldest son Victor.The firm and its subsidiaries operate a range of businesses, including ports, in mainland China.Li was known to have close ties with top Chinese leaders before Xi Jinping came to power.Victor Li is a long-time member of the Chinese People’s Political Consultative Conference, a top political advisory body.- Exposure to China -Rubio says the current arrangement is not in the national interests of the United States. If Beijing ordered a shutdown of the canal, a Hong Kong firm would have no choice but to comply as “a company based in Hong Kong is the government of China”, Rubio said last week, without specifying CK Hutchison by name.A former British colony, Hong Kong was handed over to China in 1997 under a “One Country, Two Systems” framework which promised a high degree of autonomy and a separate legal and financial system.But Beijing has remoulded Hong Kong in its authoritarian image after the city saw huge and sometimes violent pro-democracy protests in 2019.Critics say the city’s two subsequently imposed national security laws curtail rights and undermine the free and open business environment that made Hong Kong an international finance hub.In 2020, Israel rejected an infrastructure bid from CK Hutchison after then US secretary of state Mike Pompeo warned about Chinese involvement.- ‘Never interfered’ -A Hong Kong government spokesperson told AFP that the city’s authorities have “never interfered in the commercial operation of Hong Kong companies”.The financial hub has been a “staunch supporter of the multilateral trading system and opposes any country imposing measures or restrictions that undermine normal trade or business operations”, the spokesperson said.CK Hutchison did not respond to questions about canal operations. Last month the company directed AFP to a statement by its Panama subsidiary.

Stock markets slumped, the dollar rallied and oil prices rose Monday as US President Donald Trump eyed more tariffs after launching trade wars with Canada, China and Mexico, heaping pressure on the global economy.Asian equity indices mostly slid by the close, while in Europe the push lower was driven by Frankfurt with a fall of two percent around midday.Paris shed nearly two percent as shares prices of European automakers fell sharply.Having launched tariffs on US neighbours and China at the weekend, Trump said he would impose levies on the European Union. He added that non-EU member Britain would likely avoid immediate tariffs, helping the London stock market to limit losses.”Investors fear that this trade war will result in a significant deterioration in the global economy,” said John Plassard, investment specialist at Swiss asset manager Mirabaud.There was a sharp selloff across the cryptocurrency sector, with bitcoin slumping around seven percent.Oil prices rallied, however, as Trump’s tariffs on Canada and Mexico include the commodity.Haven investment gold slipped, having hit a fresh record above $2,800 an ounce last week.Trump’s action sees 25 percent levies on imports from Canada and Mexico and 10 percent duties on Chinese goods.Analysts at Oxford Economics said the tariffs could see Mexican inflation surge to six percent annually, from 4.2 percent in December. The peso sank versus the dollar Monday.Chief EY economist Gregory Daco said Canada’s economy could shrink 2.7 percent this year and 4.3 percent next year.Canada said it would file a World Trade Organization claim against the United States, while Mexican President Claudia Sheinbaum announced that retaliatory tariffs would be imposed on US products.China’s trade ministry said Beijing would take “corresponding countermeasures”.As for the EU, the bloc must show its muscle in the face of threatened tariffs, French President Emmanuel Macron warned.”If we are attacked in terms of trade, Europe — as a true power — will have to stand up for itself and therefore react,” Macron said as he arrived for leaders’ talks in Brussels.In Asia, the Year of the Snake started with a nasty bite for stock markets.Tokyo, Seoul and Jakarta each shed more than two percent while Sydney, Bangkok and Wellington were each off more than one percent. Singapore and India also fell, while Hong Kong gave up early deep losses to end only marginally down. Shanghai remained closed for a holiday.Taipei plunged more than three percent, with chip titan and market-heavyweight TSMC diving 5.7 percent on the first day of trade since China’s DeepSeek unveiled a cheaper artificial intelligence model rivalling those of US tech giants.- Key figures around 1045 GMT -London – FTSE 100: DOWN 1.3 percent at 8,564.52 pointsParis – CAC 40: DOWN 1.8 percent at 7,811.37Frankfurt – DAX: DOWN 1.8 percent at 21,344.59Tokyo – Nikkei 225: DOWN 2.7 percent at 38,520.09 (close)Hong Kong – Hang Seng Index: FLAT at 20,217.26 (close)Shanghai – Composite: Closed for a holidayNew York – Dow: DOWN 0.8 percent at 44,544.66 (close)Euro/dollar: DOWN at $1.0239 from $1.0363 on FridayPound/dollar: DOWN at $1.2310 from $1.2392Dollar/yen: DOWN at 154.89 yen from 155.18 yenEuro/pound: DOWN at 83.21 pence from 83.59 penceBrent North Sea Crude: UP 1.0 percent at $76.43 per barrelWest Texas Intermediate: UP 1.9 percent at $73.88 per barrel

US President Donald Trump said he will discuss the punishing tariffs he has levied on Canada and Mexico with both countries on Monday, as markets sank on fears over the impact on the global economy.The 25 percent duties — footed by American companies importing from Mexico and Canada — sent European and Asian stocks slumping at the open Monday.The Mexican peso and Canadian dollar also sank against the greenback, while oil jumped despite Trump placing the levy on Canada’s energy imports at 10 percent to limit a spike in fuel prices.Besides the US neighbors, Trump also hit China with a 10 percent tariff in addition to existing levies. Trump told reporters after flying back to Washington Sunday evening from a weekend in Florida that he was “speaking with Prime Minister (Justin) Trudeau tomorrow morning, and I’m also speaking with Mexico tomorrow morning.”China, Mexico and Canada are the top three US trade partners and have all vowed to retaliate when the tariffs take effect Tuesday.Trump, a fervent supporter of tariffs, had always maintained that their impact would be borne by foreign exporters without being passed on to American consumers, contradicting the opinion of a broad range of experts.However, the Republican acknowledged Sunday that Americans might feel economic “pain”.”But we will Make America Great Again, and it will all be worth the price that must be paid,” Trump wrote in all-caps on his Truth Social media platform.Analysts expect the trade war to slow US growth and increase prices — at least in the short term — something the president had resisted acknowledging, with frustration over rising costs seen as a major factor in his 2024 election win.The tariffs “will immediately weigh on the US growth outlook… and prevent the US dollar from fully benefiting from Trump’s America First Policies,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.”Instead, the US could end up in a less appetizing America Alone setting.”John Plassard, investment specialist at Swiss asset manager Mirabaud, said: “Investors fear that this trade war will result in a significant deterioration in the global economy.”Trump has cited illegal immigration and the trafficking of the deadly opioid fentanyl as reasons for the “emergency” measures.But he also expressed general outrage on Sunday at trade deficits, which he has long viewed as signs of unfair treatment against the United States.”We’re not going to be the ‘Stupid Country’ any longer,” he said.- ’51st state’ -Trump took particular aim at Canada in a separate social media post, repeating his call for America’s northern neighbor to become a US state.Claiming the United States pays “hundreds of billions of dollars to SUBSIDIZE Canada,” Trump said that “without this massive subsidy, Canada ceases to exist as a viable Country.””Therefore, Canada should become our Cherished 51st State,” he said, reiterating the expansionist threat against one of the United States’s closest allies.The US Census Bureau says the 2024 trade deficit in goods with Canada was $55 billion.Canadian backlash was swift, with video posted to social media showing fans booing when the US national anthem was sung during a basketball game between the Toronto Raptors and the Los Angeles Clippers.Trudeau vowed Saturday to hit back with 25 percent levies on select American goods worth Can$155 billion ($106.6 billion), with a first round Tuesday followed by a second in three weeks.The White House has not publicly announced what actions could end the tariffs.”We’re obviously open to any other suggestions that come our way,” Canada’s ambassador to the United States Kirsten Hillman told ABC News on Sunday.Mexican President Claudia Sheinbaum said she was also awaiting Trump’s response to her proposal for dialogue. She said she had directed her economy minister to “implement Plan B,” which includes unspecified “tariff and non-tariff measures.”- ‘No winners’ -Trump also indicated that while he would not immediately impose tariffs on Britain, it would “definitely happen with the European Union” — a threat to which the bloc said it would “respond firmly.”There are “no winners in trade wars,” Kaja Kallas, the EU’s top diplomat in Brussels, warned Monday. “We need America, and America needs us as well.”The tariff announcements capped an extraordinary second week of Trump’s new term. The United States is still reeling from its worst aviation disaster in years, the collision of an army helicopter and an airliner that killed 67 people in the US capital.His administration has also moved to drastically overhaul the government with the help of the so-called Department of Government Efficiency, which Trump has tasked billionaire Elon Musk with running to slash federal spending.

US tech giant OpenAI on Monday unveiled a ChatGPT tool called “deep research” that can produce detailed reports, as China’s DeepSeek chatbot heats up competition in the artificial intelligence field.The company made the announcement in Tokyo, where OpenAI chief Sam Altman also trumpeted a new joint venture with tech investor SoftBank Group to offer advanced artificial intelligence services to businesses.AI newcomer DeepSeek has sent Silicon Valley into a frenzy, with some calling its high performance and supposed low cost a wake-up call for US developers.OpenAI, whose ChatGPT led generative AI’s emergence into public consciousness in 2022, said its new tool “accomplishes in tens of minutes what would take a human many hours”.”You give it a prompt, and ChatGPT will find, analyse, and synthesise hundreds of online sources to create a comprehensive report at the level of a research analyst,” the company said in a statement.Altman said on social media platform X that deep research, which paid “Pro” ChatGPT users can access 100 times a month, was “slow” and required a lot of computing power, but he was also bullish.”My very approximate vibe is that it can do a single-digit percentage of all economically valuable tasks in the world, which is a wild milestone,” Altman wrote in another X post.One commentator, entrepreneur Michel Levy Provencal, said the new tool could mean “very big problems ahead for consultants”.- Crystal ball -SoftBank and OpenAI are part of the Stargate drive announced by US President Donald Trump to invest up to $500 billion in artificial intelligence infrastructure in the United States.Altman and SoftBank founder Masayoshi Son met Japanese Prime Minister Shigeru Ishiba on Monday evening, and discussed extending “Stargate into Japan”, Son told reporters afterwards.”We want to create the cutting-edge AI infrastructure — what I mean by that is the world’s biggest, cutting-edge AI data centres,” Son said, without giving further details.Ishiba is expected to visit Washington to meet Trump for the leaders’ first in-person meeting later this week.At a business forum held Monday afternoon, Son announced a new joint venture equally split between SoftBank Group and OpenAI.Holding a purple crystal ball, the Japanese tycoon outlined the services of a new AI product called Cristal, which can crunch system data, reports, emails and meetings for firms.A joint statement said SoftBank would “spend $3 billion annually to deploy OpenAI’s solutions across its group companies”.The venture “will serve as a springboard for introducing AI agents tailored to the unique needs of Japanese enterprises while setting a model for global adoption”, it said.- ‘No plans’ to sue -DeepSeek’s performance has sparked a wave of accusations that it has reverse-engineered the capabilities of leading US technology, such as the AI powering ChatGPT.OpenAI warned last week that Chinese companies are actively attempting to replicate its advanced AI models, prompting closer cooperation with US authorities.When asked if he was considering taking legal action, Altman said on Monday that “we have no plans to sue DeepSeek right now”.”DeepSeek is certainly an impressive model, but we believe we will continue to push the frontier and deliver great products, so we’re happy to have another competitor,” he also reiterated.OpenAI says rivals are using a process known as distillation in which developers creating smaller models learn from larger ones by copying their behaviour and decision-making patterns — similar to a student learning from a teacher.The company is itself facing multiple accusations of intellectual property violations, primarily related to the use of copyrighted materials in training its generative AI models.While OpenAI has not confirmed Altman’s next movements, media reports said he would travel on Tuesday to Seoul.A spokesperson for South Korean IT conglomerate Kakao told AFP it would on Tuesday announce its “collaboration with OpenAI” but did not confirm whether Altman would be there.burs-kaf/mtp

Hong Kong’s economic growth slowed to 2.5 percent in 2024 as residents increasingly look to spend elsewhere, the city’s government said on Monday, warning that the year ahead will bring “heightened uncertainties”.The Chinese financial hub saw a post-pandemic rebound in 2023 after the city reopened to international business and travel but lost some momentum as China’s economic slowdown deepened.Gross domestic product increased by 2.5 percent in real terms in 2024, compared with 3.2 percent growth the year before, according to preliminary figures released by the city’s government.”Private consumption expenditure recorded a slight decline, affected by the change in residents’ consumption patterns,” a government spokesperson said.Increasing numbers of Hong Kong residents are choosing to spend in neighbouring Shenzhen since travel resumed, preferring its cheaper groceries, entertainment and even healthcare services.Private consumption dropped by 0.6 percent year-on-year, while other major GDP components all recorded growth.Financial secretary Paul Chan predicted at the start of last year growth of up to 3.5 percent, but revised down his estimate in November to 2.5 percent.- Looming tariffs -The government said it expected Hong Kong’s economy to grow in 2025 “despite heightened uncertainties in the external environment”.US President Donald Trump announced on Saturday 10 percent tariffs against China, sparking fears of trade wars that could pummel the global economy.”Trade protectionist policies implemented by the United States may disrupt global trade flows and adversely affect Hong Kong’s goods exports,” the Hong Kong government spokesperson warned.”They may also lead to a slower pace of interest rate cuts in the US and keep the Hong Kong dollar strong for longer.”However, Hong Kong’s economy would benefit from Beijing’s efforts to stimulate growth and bolster market confidence, he said.The Chinese finance hub had been strained by the high interest rate environment because its currency is pegged to the greenback, with heightened borrowing costs holding back consumption and investment.Hong Kong’s government is also facing pressure to cut its spending, with it on course to log a deficit of nearly HK$100 billion ($12.8 billion) — the third consecutive year of deficit.Government consumption as a component of GDP increased by 0.9 percent in 2024.Exports of goods and services rose by 4.7 and 4.8 percent respectively over that period, with the government citing “improved external demand” for goods and more visitor arrivals.Imports of goods and services rose by 2.3 percent and 11.8 percent respectively.

Stock markets in Asia and Europe sank and the dollar surged Monday after Donald Trump signed off huge tariffs on China, Canada and Mexico, and warned the European Union would be hit “pretty soon”.Less than two weeks after moving back into the White House, the US president on Saturday made good on warnings that he would resume his hardball tactics, sparking fears of trade wars that could hammer the global economy.The move will see 25 percent levies on imports from Canada and Mexico and 10 percent duties on Chinese goods.Analysts at Oxford Economics said the tariffs could see Mexican inflation surge to six percent annually, from 4.2 percent in December, while the peso sank seven percent.Chief EY economist Gregory Daco said Canada’s economy could shrink 2.7 percent this year and 4.3 percent next year.White House Press Secretary Karoline Leavitt said tariffs were “promises made and promises kept by the president”.Canada said it would file a World Trade Organization claim against the United States, while Mexican President Claudia Sheinbaum announced that retaliatory tariffs would be imposed on US products.China’s trade ministry said Beijing would take “corresponding countermeasures”.While the decision had been well-flagged, equity markets took a hefty hit, with all three main indexes on Wall Street turning negative at the end of Friday trade.In Asia, the Year of the Snake started with a nasty bite.Tokyo, Seoul and Jakarta each shed more than two percent while Sydney, Bangkok and Wellington were each off more than one percent. Singapore and India also fell, while Hong Kong gave up early deep losses to end only marginally down. Shanghai remained closed for a holiday.London opened more than one percent lower, while Paris and Frankfurt each lost more than two percent.- Investors ‘feel jolt’ -Taipei plunged more than three percent, with chip titan and market-heavyweight TSMC diving 5.7 percent on the first day of trade since China’s DeepSeek unveiled a cheaper artificial intelligence model rivalling those of US tech giants.”This wasn’t a shock — it’s been telegraphed for weeks — but investors will still feel the jolt as markets adjust to a move almost universally seen as damaging to global growth and financial stability,” said Stephen Innes at SPI Asset Management.On currency markets the dollar soared 2.3 percent against the Mexican peso and more than one percent against the Canadian dollar and euro.It was also sharply higher against the South Korean won, Australian dollar and South African rand.”We suspect the path of least resistance for now is for Asian currencies and risk assets to weaken, together with a greater risk premia to account for future meaningful tariff moves beyond what we have seen,” said Michael Wan at MUFG.Gold slipped, having hit a fresh record above $2,800 last week, as the stronger dollar made it more expensive to buy the metal for holders of other currencies.Trump’s latest salvo came at the end of a volatile week for markets following news of DeepSeek’s R1 chatbot, which saw some investors re-evaluate their surge into tech giants in recent years as they bet big on the AI revolution.It also overshadowed healthy earnings results from Apple, which soothed some worries about the tech sector, and data showing that the Federal Reserve’s preferred gauge of inflation met forecasts.Oil prices jumped as Trump’s tariffs on Canada and Mexico include the commodity, while bitcoin dropped more than five percent.- Key figures around 0810 GMT -Tokyo – Nikkei 225: DOWN 2.7 percent at 38,520.09 (close)Hong Kong – Hang Seng Index: FLAT at 20,217.26 (close)London – FTSE 100: DOWN 1.1 percent at 8,577.26Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.0221 from $1.0363 on FridayPound/dollar: DOWN at $1.2275 from $1.2392Dollar/yen: UP at 155.67 yen from 155.18 yenEuro/pound: DOWN at 83.25 pence from 83.59 penceWest Texas Intermediate: UP 1.9 percent at $73.92 per barrelBrent North Sea Crude: UP 1.0 percent at $76.43 per barrelNew York – Dow: DOWN 0.8 percent at 44,544.66 (close)

Samsung Electronics chief Lee Jae-yong was cleared again Monday of a raft of charges linked to a controversial 2015 merger which prosecutors claimed was designed to seal his control of the South Korean tech giant.Lee was orginally cleared of the charges in a trial last year, but prosecutors appealed against the verdict.”The evidence presented was not sufficient to prove the charges beyond a reasonable doubt,” court documents seen by AFP said. Lee was cleared of charges including stock price rigging, breach of trust, and accounting fraud.They relate to the 2015 merger between Samsung C&T — a construction and engineering firm — and Cheil Industries.Lee did not answer any questions as he left the Seoul court, but his lawyers told reporters they “sincerely thank the court for its wise judgement”.”It has been a very long time since the investigation and trial process of this case began,” his legal team said.”We hope that with this ruling, the defendants can now return to their rightful duties and responsibilities.”Lee was jailed for 18 months in a separate fraud and embezzlement case following a sweeping investigation that also brought down former president Park Geun-hye in 2017.The current executive chairman of Samsung Electronics — the crown jewel of South Korea’s sprawling Samsung group — was released on parole in August 2021 having served half his sentence.He returned to management shortly afterwards, and was officially named executive chairman in October 2022 — two months after South Korea’s then president pardoned him for the convictions.

Asian stocks tanked and the dollar surged Monday after Donald Trump signed off huge tariffs on China, Canada and Mexico, and warned the European Union would be hit “pretty soon”.Less than two weeks after moving back into the White House the US president on Saturday made good on warnings that he would resume his hardball tactics, sparked fears of trade wars that could hammer the global economy.The move will see 25 percent levies on imports from Canada and Mexico and 10 percent duties on Chinese goods. Analysts at Oxford Economics said the tariffs could see Mexican inflation surge to six percent annually, from 4.2 percent in December, while the peso sank seven percent.Chief EY economist Gregory Daco said Canada’s economy could shrink 2.7 percent this year and 4.3 percent next year.White House Press Secretary Karoline Leavitt said tariffs were “promises made and promises kept by the president”.Canada said it will file a World Trade Organization claim against the United States, while Mexican President Claudia Sheinbaum announced that retaliatory tariffs would be imposed on US products. China’s trade ministry said Beijing would take “corresponding countermeasures”.While the decision had been well-flagged, equity markets took a hefty hit, with all three main indexes on Wall Street turning negative at the end of Friday trade after Trump reaffirmed he would impose the tariffs.In Asia, the Year of the Snake started with a nasty bite.Tokyo and Seoul each shed more than two percent while Hong Kong shed more than one percent with Sydney and Wellington. Singapore was also in the red.- Investors ‘feel jolt’ -Taipei plunged more than three percent, with chip titan and market-heavyweight TSMC diving 5.3 percent on the first day of trade since China’s DeepSeek unveiled a cheaper artificial intelligence model rivalling those of American tech giants.”This wasn’t a shock — it’s been telegraphed for weeks — but investors will still feel the jolt as markets adjust to a move almost universally seen as damaging to global growth and financial stability,” said Stephen Innes at SPI Asset Management.On currency markets the dollar soared 2.3 percent against the Mexican peso and more than one percent against the Canadian dollar.It was also sharply higher against the South Korean won, Australian dollar and South African rand”We suspect the path of least resistance for now is for Asian currencies and risk assets to weaken, together with a greater risk premia to account for future meaningful tariff moves beyond what we have seen,” said Michael Wan at MUFG.Gold slipped, having hit a fresh record above $2,800 last week, as the stronger dollar made it more expensive to buy the metal for holders of other currencies.Trump’s latest salvo came at the end of a volatile week for markets following news of DeepSeek’s R1 chatbot, which saw some investors re-evaluate their surge into tech giants in recent years as they bet big on the AI revolution.It also overshadowed healthy earnings results from Apple, which soothed some worries about the tech sector, and data showing that the Federal Reserve’s preferred gauge of inflation met forecasts.Oil prices jumped as Trump’s tariffs on Canada and Mexico include the commodity.- Key figures around 0200 GMT -Tokyo – Nikkei 225: DOWN 2.1 percent at 38,727.99Hong Kong – Hang Seng Index: DOWN 1.8 percent at 19,868.82Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.0237 from $1.0363 on FridayPound/dollar: DOWN at $1.2285 from $1.2392Dollar/yen: UP at 155.80 yen from 155.18 yen Euro/pound: DOWN at 83.32 pence from 83.59 pence West Texas Intermediate: UP 1.8  percent at $73.82 per barrelBrent North Sea Crude: UP 0.8 percent at $76.24 per barrelNew York – Dow: DOWN 0.8 percent at 44,544.66 (close)London – FTSE 100: UP 0.3 percent at 8,673.96 (close)

President Donald Trump announced broad tariffs Saturday on major US trading partners Canada, Mexico and China, claiming a “major threat” from illegal immigration and drugs — a move that sparked promises of retaliation.Canadian and Mexican exports to the United States will face a 25 percent tariff starting Tuesday, although energy resources from Canada will have a lower 10 percent levy.Goods from China, which already face various rates of duties, will see an additional 10 percent tariff.Trump’s orders also suspended exemptions allowing low-value imports from the three countries to enter the US duty-free.The announcement threatens upheaval across supply chains, from energy to automobiles to food.Trump invoked the International Emergency Economic Powers Act in imposing the tariffs, with the White House saying “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency.”The aim is to hold all three countries “accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” the White House added.China’s commerce ministry said in a statement it would take “corresponding countermeasures” and file a claim against Washington at the World Trade Organization.Mexican President Claudia Sheinbaum announced that her country would impose retaliatory tariffs.Sheinbaum said she had told her economy minister “to implement Plan B that we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests.”Canadian Prime Minister Justin Trudeau — who spoke with Sheinbaum — separately said his country would hit back with 25 percent levies of its own on select American goods worth Can$155 billion (US$106.6 billion), with a first round on Tuesday followed by a second one in three weeks.”We’re certainly not looking to escalate. But we will stand up for Canada, for Canadians, for Canadian jobs,” he said, as he warned of a fracture in longstanding Canada-US ties.British Columbia Premier David Eby announced that his province would specifically retaliate against “red” US states led by members of Trump’s Republican Party.On Sunday, the finance minister of Japan — a major US trade partner — said they were “deeply concerned about how these tariffs could affect the world’s economy.”Trump has repeatedly expressed his approval of tariffs as a policy measure, and has signaled that Saturday’s action could be the first volley in further trade conflicts to come.This week, he also pledged to impose future duties on the European Union.He has also promised tariffs on semiconductors, steel, aluminum, oil and gas.”Tariffs are a powerful, proven source of leverage for protecting the national interest,” the White House said.- ‘Opening salvo’ -“The tariff action announced today makes clear that our friends, neighbors and Free Trade Agreement partners are in the line of fire,” said Wendy Cutler, vice president at the Asia Society Policy Institute and a former US trade negotiator.”The move today is an opening salvo on the tariff front,” she told AFP.Economic integration between the United States, Mexico and Canada — who share a trade pact — means stiff tariffs will have “a strong and immediate impact” in all three countries, she said.Imposing sweeping tariffs on the three biggest US trading partners in goods carries risks for Trump, who won November’s election partly due to public dissatisfaction over the economy.Higher import costs would likely “dampen consumer spending and business investment,” said EY chief economist Gregory Daco.He expects inflation would rise by 0.7 percentage points in the first quarter this year with the tariffs in place, before gradually easing.”Rising trade policy uncertainty will heighten financial market volatility and strain the private sector, despite the administration’s pro-business rhetoric,” he said.Economists also expect growth to take a hit.Trump’s supporters have downplayed fears that tariffs would fuel inflation, with some suggesting his planned tax cuts and deregulation measures could boost growth instead.- ‘Drive up costs’ -Doug Ford, premier of Canada’s economic engine Ontario, warned of potential job losses and a slowdown in business with tariffs.He told CNN Saturday: “We’re going to stand up for what’s right.”US Senate Minority Leader Chuck Schumer has warned new tariffs could “further drive up costs for American consumers.”Canada and Mexico are major suppliers of US agricultural products. The tariffs are also expected to hit the auto industry hard, since automakers and suppliers produce components throughout the region.Analysts have warned that hiking import taxes on crude oil from countries like Canada and Mexico threaten US energy prices too.Nearly 60 percent of US crude oil imports are from Canada, according to a Congressional Research Service report.

Donald Trump’s new tariffs will probably not have a major impact on China’s economy but may herald the opening salvo of another bruising trade war with Beijing, analysts said Sunday.The US President on Saturday announced sweeping measures against major trade partners, with goods from China facing an additional 10 percent tariff on top of the duties they already endure.Trump said the measures aimed to punish countries for failing to halt flows of illegal migrants and drugs including fentanyl into the United States.However, his action against Beijing was “not a big shock to China’s economy”, according to Zhiwei Zhang, president of Pinpoint Asset Management.Given Beijing had already factored in higher tariffs this year, the move was “unlikely to change the market expectation on China’s macro outlook”, Zhang said.”I don’t think China needs to take action, such as exchange rate depreciation, to offset (the impact),” he added.According to Bloomberg Economics, the 10 percent levy could knock out 40 percent of Beijing’s goods exports to the US, affecting 0.9 percent of Chinese GDP.That is a small fraction of China’s vast economy, but it would put extra pressure on policymakers already grappling with slowing growth, a property sector crisis, and sluggish domestic consumption.- ‘First strike’ -Experts said Trump’s focus seemed to be on trade relationships with Canada and Mexico more than China.Under the new rules, Canadian and Mexican exports to the US will face 25 percent tariffs, with a partial exemption for Canadian energy resources.But with targeted countries already vowing retaliation and Trump promising more duties in future, the move was “just the first strike in what could become a very destructive global trade war”, said Paul Ashworth, chief North America economist at Capital Economics.China has said it will take “corresponding countermeasures” against the tariffs, but has not elaborated what form they might take.Gary Ng, a senior economist at Natixis, said Beijing “may react by imposing reciprocal tariffs on US imports, limiting exports of critical materials, and restricting market access to some American firms”.”At the same time, China may also see this as an opportunity to divide US allies and build closer relationships with other countries,” he told AFP.Zhang, of Pinpoint, said “the trade negotiation between China and the US will be a long process”.”I think this is just the beginning. We will have to wait and see if the US will raise tariffs on China further down the road,” he said.- Collective shrug -On the streets of Beijing this weekend, the threat of looming tariffs was met with a collective shrug.”China doesn’t really care too much about the (trade) barriers, because we have already prepared for them,” Xu Yiming, a private equity professional, told AFP outside a busy downtown shopping mall.China’s robust supply chains and cheap exports were “actually good for the American public, but MAGA supporters might need some trade barriers to help bring jobs back to the US”, the 36-year-old added, using the acronym for Trump’s grassroots movement.”In the end, it’s everyday people who bear the brunt of tariffs,” he said.Most people approached by AFP reporters said they were either unaware of the prospective levies or did not understand them well enough.And though some declined to speak due to the political sensitivity of China-US ties, many seemed more interested in enjoying the ongoing Lunar New Year holiday.”He should look after the US and leave China to us,” a gruff middle-aged man said of Trump, before wandering off in the direction of a raucous temple fair.