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Rubio warns Panama of U.S. retaliation if China's canal influence remains

Secretary of State Marco Rubio told Panama officials that Chinese influence over the Panama Canal must be curbed or the U.S. will take retaliatory actions, the State Department said Sunday.

Why it matters: Rubio's warning to Panama President José Raúl Mulino and Foreign Minister Javier Martínez-Acha is another pressure point on the country since President Trump said he intended to regain control of the Panama Canal.


  • The trip to Panama is Rubio's first abroad since being sworn in as secretary of state.

Driving the news: Since winning a second presidential term last November, Trump has tripled down on his demands regarding the Panama Canal, and hasn't ruled out using military force to obtain control of it.

  • His demands include U.S. ships paying lower rates to use the canal — after claiming that Panama charges American ships more than other nations.
  • Trump's complaints are partially based on the fact that a Hong Kong-based company has a contract for running the canal, which has been under Panama's control since 1999.
  • Mulino has so far rejected Trump's demands to hand over control of the canal back to the United States.

What they are saying: Rubio told Mulino and Martínez-Acha that Trump has made "a preliminary determination" that the current Chinese influence over the Panama Canal area is a threat to the canal, State Department spokeswoman Tammy Bruce said in a statement.

  • Rubio said that it is also a violation of the treaty between the U.S. and Panama which defines the neutrality and operation of the canal. 
  • "Secretary Rubio made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty," Bruce said.

Go deeper: Trump dreams of empire expansion

GOP applauds Trump tariffs as trade war looms

As trade war fears circulate, lawmakers are manning their posts: Democrats are warning prices will skyrocket — while Republicans say the potential discomfort will be worth it in the end.

The big picture: Economists fear the across-the-board tariffs on Mexico, Canada and China — and the immediate retaliation that followed — could further stress already strained U.S. households and walk back recent economic gains.


  • Trump's 25% tariffs on Canada and Mexico and additional 10% tariffs on China could effectively tax the average U.S. household an extra $830 this year, an analysis from the nonpartisan nonprofit Tax Foundation found.
  • The president conceded in a Sunday Truth Social post that there may be "SOME PAIN" as a result of his tariffs on the U.S.' top three trading partners, but he contended "IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."

Zoom out: Some of his close allies on Sunday echoed that sentiment.

  • Department of Homeland Security Secretary Kristi Noem said on NBC News' "Meet the Press" that if "prices go up, it's because of other people's reactions to America's laws."
  • Sen. Eric Schmitt (R-Mo.) characterized Trump's tariffs as a border tool, telling NBC's Kristen Welker they "are meant to bring Canada and Mexico the table for the fentanyl that is streaming into our communities."
  • Almost all of the 21,900 pounds of fentanyl seized last year was at the southwestern border, but 43 pounds was recovered at the northern border, according to Customs and Border Patrol statistics.

Vice President JD Vance said before Trump signed off on his anticipated tariffs that "we'll see what happens" regarding retaliation.

  • He argued in an interview aired Sunday on Fox's "Sunday Morning Futures" that the real retaliation was "Donald Trump saying, 'no more.'"

Yes, but: Trump's campaign-trail vision for tariffs as a cure-all does not align with the consumer consequences and supply chain disruptions economists and business interest groups foresee.

  • Tariffs can raise revenue for the governments imposing them — but the impact of tariffs can be passed on to consumers through a wide array of everyday products.
  • Most of the country's avocados and beer, for example, come from Mexico. Auto parts, oil and gas are also key resources the U.S. imports from Canada.
  • Former Rep. Jaime Herrera Beutler (R-Wash.) said on CNN's "State of the Union" said she's concerned that the president doesn't know his "end game" on his tariffs, adding, "If you're going to pick a fight in a bar, maybe you should scope the exits."

Between the lines: For months, senators stressed they saw Trump's tariff threats as a negotiating tactic, Axios' Stef W. Kight, Justin Green and Hans Nichols report.

  • Sen. Lindsey Graham (R-S.C.) told "Fox News Sunday" that "these tariffs are designed to get these countries to change their behavior" and that if those changes are made, "I think the tariffs probably go away."
  • Lawmakers who spoke to Axios ahead of Trump's tariff kickoff often pointed to concerns about the taxes on imported goods triggering a rise in inflation, which was a sore spot for Democrats in November.

But the tariffs happened — and now Democrats are on offense.

  • Sen. Mark Warner (D-Va.) characterized the move as the "Donald Trump Super Bowl tax," on CBS News' "Face the Nation," noting key imports from Mexico — like beer, avocados and tomatoes — could carry a larger price tag.
  • His fellow Virginian, Sen. Tim Kaine (D), said Trump's first-term tariffs were "a tax on Virginia consumers," predicting Americans will see "higher prices for energy, higher prices for groceries."
  • Kaine said he was struck by what he saw as the "irony" of Trump's executive order declaring an "energy emergency" followed by 10% tariffs on Canadian energy.
  • "The emergency is self-created," Kaine said.

Go deeper: Trump builds a tariff wall

U.S. auto industry could be decimated by tariffs

Cars that are made in America aren't only made in America — they're made across North America.

  • As a result, Trump's across-the-board tariffs on all trade with Mexico or Canada risks making U.S. autos much more expensive than foreign imports.

Why it matters: The U.S. auto industry could shut down within a week, by some estimates, thanks to these tariffs. Even if it doesn't, there is no automaker that's set up to operate in a world of high-friction North American border duties.


The big picture: With modern supply chains, a single component in a vehicle can cross the U.S. border between six and eight times before final assembly.

  • Trump's order makes it clear that duty is payable every time any component crosses into the U.S. — there's no "drawback" allowed that limits the tariff to just the value added abroad.

Zoom out: What that means is that the 25% tariffs won't just be payable on full vehicles that have their final assembly in Mexico, like the Chevrolet Equinox or the Ford Maverick.

  • They're also going to affect nearly all of the components in nearly all cars made in North America, often multiple times over.
  • Aside from the actual tariffs themselves, there's also no infrastructure in place to even place a precise dollar value on all the components that travel back and forth, let alone fill out customs paperwork on them.

The bottom line: If you add up all the tariffs that are going to apply to U.S.-made vehicles, they could easily end up dwarfing total tariffs on finished cars imported from Europe, Japan, or Korea.

  • Far from boosting the U.S. auto industry, these tariffs, if they stay in place for any length of time, could end up decimating it.

Billionaires, industry leaders, and execs urge Trump to rethink 'devastating' tariffs on Canada and Mexico

The aluminum industry is asking Donald Trump to make tariff exceptions for Canada.
Some business leaders are asking President Donald Trump to rethink tariffs.

Bloomberg/Bloomberg via Getty Images

  • Industry and business leaders are reacting to President Donald Trump's latest tariffs.
  • The Trump administration said Saturday it had imposed new levies on Canada, Mexico, and China.
  • All three countries vowed to retaliate, threatening a trade war.

Billionaires, industry leaders, and executives are reacting to President Donald Trump's tariffs against Canada, Mexico, and China.

The Trump administration said Saturday it had imposed a 25% tariff on goods from Canada and Mexico and a 10% tariff on China.

The announcement sparked swift responses from all three countries. Canada and Mexico promised retaliatory tariffs, and China vowed "corresponding countermeasures."

Trump says the tariffs are necessary to pressure Mexico, Canada, and China to do more to stem the flow of illegal fentanyl into the United States. Addiction and overdoses related to fentanyl, a synthetic opioid, have gripped the United States for years, hollowing out towns and city neighborhoods all over the country. The drug is often produced in China and smuggled over US borders.

"Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country," the White House said in a statement on Saturday.

Business leaders, however, are urging Trump to reconsider, fearing a global trade war that could wreak havoc on American industries.

Mark Cuban, billionaire entrepreneur

In a post on Bluesky, Cuban warned that the new levies would cost people money and hurt businesses.

"I'm going to put my rich guy hat on and say I hope that Mexico and Canada issue equal, retaliatory tariffs and stick to them for an extended period," Cuban wrote.

"I apologize to all the people it will cost money and the businesses it will hurt. But it's the only way for tariffs to be seen for what they are."

Tobi Lütke, Shopify CEO

In a post on X, Lütke, the CEO of the Canadian firm Shopify, said he was disappointed with the US tariffs and Canada's government's response.

Canadian Prime Minister Justin Trudeau said Saturday that Canada would impose 25% tariffs on C$155 billion (around $106 billion) of US goods following the Trump administration's decision.

But Lütke said hitting back would "not lead to anything good."

"Canada thrives when it works with America together. Win by helping America win," he wrote. "These tariffs are going to be devastating to so many people's lives and small businesses."

Ricardo Salinas Pliego, Mexican billionaire

Pliego, the chairman of the retail and banking conglomerate Grupo Elektra, slammed the tariffs in a series of posts on X but said Mexico should not retaliate.

"As things stand, there is nothing to do but endure this misfortune imposed on us," he wrote. "Perhaps, with the passage of time, more prepared and sensible minds will prevail in the USA and things will change, but that is not in our hands."

"What we definitely SHOULD NOT DO is play the 'Boy Hero' and throw ourselves into the void, by putting MORE taxes on Mexican citizens, who are already screwed by Trump's actions," he added.

Aluminum Association

The Aluminum Association has urged Trump to exempt Canada from the tariffs, saying it was vital to help protect jobs and local manufacturers.

In a statement on Saturday, Charles Johnson, the president and CEO of the association, which represents aluminum production and jobs in the United States, welcomed Trump's efforts to "support American manufacturing" but said the industry's strength relied on imports from the north.

"Thanks to robust domestic demand and coming investment, the US aluminum industry needs a steady and predictable supply of primary, secondary and scrap aluminum," Johnson said. "Today, much of that metal comes from North American trading partners, especially Canada."

United Steelworkers

The USW, representing 850,000 workers in metals, mining, and other industries, has also called for Trump to reconsider tariffs on Canada.

In a statement, USW International President David McCall said the union had "long called for systemic reform of our broken trade system, but lashing out at key allies like Canada is not the way forward."

"Canada has proven itself time and again to be one of our strongest partners when it comes to national security, and our economies are deeply integrated," the statement continued.

National Association of Manufacturers

NAM President and CEO Jay Timmons said manufacturers were already facing increasing cost pressures and that the latest tariffs on Canada and Mexico threatened "to upend the very supply chains that have made US manufacturing more competitive globally."

"The ripple effects will be severe, particularly for small and medium-sized manufacturers," Timmons added. "Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk."

National Association of Home Builders

The NAHB said the tariffs on Canada and Mexico could increase construction costs and ultimately lead to higher home prices.

"More than 70% of the imports of two essential materials that home builders rely on—softwood lumber and gypsum (used for drywall)—come from Canada and Mexico, respectively," NAHB Chairman Carl Harris said in a statement.

"NAHB urges the administration to reconsider this action on tariffs."

Read the original article on Business Insider

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