BANGKOK (AP) — Asian shares sank Friday after U.S. stocks gave up much of their historic gains from the day before.

The deepening worries over President Donald Trump’ s trade war initially helped pull Japan’s Nikkei 225 share index down 5.6%.

By mid-morning in Tokyo, it was down 4.7% at 32,969.95.

The yen surged against the U.S. dollar, which also lost value against the euro.

One dollar bought 143.48 Japanese yen, down from about 146 yen a day earlier. The euro rose to $1.1305 from $1.1195.

South Korea’s Kospi fell 1.6% to 2,400.34, while in Australia, the S&P/ASX 200 shed 2.1% to 7,552.10.

Investors are viewing Trump’s decision to view a 90 day delay on higher tariffs for most countries as a ploy, not a pivot, Stephen Innes of SPI Asset Management said in a commentary.

“That’s the market hitting the brakes, hard. The sugar high from Trump’s tariff pause is fading fast, and Asia’s about to feel the comedown. The champagne’s flat, the party’s over, and the tape is twitching,” he wrote.

On Thursday, the S&P 500 tumbled 3.5%, slicing into Wednesday’s surge of 9.5% following Trump’s decision to pause many of his tariffs worldwide. The Dow Jones Industrial Average dropped 1,014 points, or 2.5%, and the Nasdaq composite tumbled 4.3%.

But China announced more countermeasures against the United States and losses for U.S. stocks accelerated after the White House clarified that the United States will tax Chinese imports at 145%, not the 125% rate that Trump had written about in his posting on Truth Social Wednesday, once other previously announced tariffs were included. The drop for the S&P 500 exceeded 6% at one point.

All told, the S&P 500 fell 188.85 points Thursday to 5,268.05. The Dow Jones Industrial Average dropped 1,014.79 to 39,593.66, and the Nasdaq composite sank 737.66 to 16,387.31.

“Trump blinks,” UBS strategist Bhanu Baweja wrote in a report about the president’s decision on tariffs, “but the damage isn’t all undone.”

China, meanwhile, has been seeking to join forces with other countries in apparent hopes of forming a united front against Trump. The world’s second-largest economy is also ramping up its own countermeasures to Trump’s tariffs.

The stock price of Warner Bros. Discovery, the company behind “A Minecraft Movie,” dropped 12.5% for one of Wall Street’s sharpest losses after China said Thursday it will “appropriately reduce the number of imported U.S. films.” The Walt Disney Co.’s stock sank 6.8%

A spokesperson for the China Film Administration said it is “inevitable” that Chinese audiences would find American films less palatable given the “wrong move by the U.S. to wantonly implement tariffs on China.”

That was after Trump and his Treasury secretary, Scott Bessent, sent a clear message to other countries Wednesday after announcing their pause on tariffs for most countries: “Do not retaliate, and you will be rewarded.”

The European Union said Thursday it will put its trade retaliation measures on hold for 90 days and leave room for a negotiated solution.

Thursday’s swings also hit the bond market, which has historically played the role of enforcer against politicians and economic policies it deemed imprudent. It helped topple the United Kingdom’s Liz Truss in 2022, for example, whose 49 days made her Britain’s shortest-serving prime minister.

Earlier this week, big jumps for U.S. Treasury yields had rattled the market, so much that Trump said Wednesday he had been watching how investors were “getting a little queasy.”

Several reasons could have been behind the sharp, sudden rise in yields. Hedge funds may have sold Treasurys in order to raise cash, and investors outside the United States may be dumping their U.S. government bonds because of the trade war. Regardless of the reasons behind it, higher Treasury yields crank up pressure on the stock market and push rates higher for mortgages and other loans for U.S. households and businesses.

The 10-year Treasury yield had calmed following Trump’s U-turn on tariffs, dropping all the way back to 4.30% shortly after the release of a better-than-expected report on inflation Thursday morning. That’s after it had shot up to nearly 4.50% Wednesday morning from just 4.01% at the end of last week.

As Thursday progressed, though, the 10-year Treasury yield climbed once again and reached 4.40%. It was trading at 4.39% early Friday.

In other dealings early Friday, U.S. benchmark crude oil lost 37 cents to $59.70 per barrel in electronic trading on the New York Stock Exchange.

Brent crude, the international standard, fell 30 cents to $63.03 per barrel.

AP Business Writer Stan Choe contributed.

TAIPEI, Taiwan (AP) — China is reaching out to other nations as the U.S. layers on more tariffs in what appears to be an attempt to form a united front to compel Washington to retreat. Days into the effort, it’s meeting only partial success with many countries unwilling to ally with the main target of President Donald Trump’s trade war.

Facing the cratering of global markets, Trump on Wednesday backed off his tariffs on most nations for 90 days, saying countries were lining up to negotiate more favorable conditions.

China has refused to seek talks, saying it would “fight to the end” in a tariff war, prompting Trump to further jack up the tax rate on Chinese imports to 145%. It was initially announced on Wednesday as 125%, but that did not include a 20% tariff on China tied to its role in fentanyl production.

China has retaliated with tariffs on U.S. goods of 84%, which took effect Thursday.

Trump’s move was seemingly an attempt to narrow what had been an unprecedented trade war between the U.S. and most of the world to a showdown between the U.S. and China.

“A just cause receives support from many,” Foreign Ministry spokesperson Lin Jian said at a daily briefing on Thursday. “The U.S. cannot win the support of the people and will end in failure.”

China has thus far focused on Europe, with a phone call between Premier Li Qiang and European Commission President Ursula von der Leyen “sending a positive message to the outside world.”

“China is willing to work with the EU to jointly implement the important consensus reached by the leaders of China and the EU, strengthen communication and exchanges, and deepen China-EU trade, investment and industrial cooperation,” the official Xinhua News Agency reported.

That was followed by a video conference between Chinese Commerce Minister Wang Wentao and EU Commissioner for Trade and Economic Security Maroš Šefčović on Tuesday to discuss the U.S. “reciprocal tariffs.”

Wang said the tariffs “seriously infringe upon the legitimate interests of all countries, seriously violate WTO rules, seriously damage the rules-based multilateral trading system, and seriously impact the stability of the global economic order,” Xinhua said.

“It is a typical act of unilateralism, protectionism and economic bullying,” Wang was quoted as saying.

“China is willing to resolve differences through consultation and negotiation, but if the U.S. insists on its own way, China will fight to the end,” Wang said.

Wang has also spoken with the 10-member Association of Southeast Asian Nations, while Li, the premier, has met with business leaders. China has “already made a full evaluation and is prepared to deal with all kinds of uncertainties, and will introduce incremental policies according to the needs of the situation,” Xinhua quoted Li as saying.

In Hong Kong, the spokesperson for the local office of China’s Foreign Ministry reiterated Beijing’s unwillingness to negotiate with the U.S. under current conditions.

“We must solemnly tell the U.S.: a tariff-wielding barbarian who attempts to force countries to call and beg for mercy can never expect that call from China,” Huang Jingrui wrote in an op-ed appearing in the South China Morning Post.

If the U.S. is truly sincere about starting a dialogue with China, it should “immediately rectify its wrong practices and adopt the right attitude of equality, respect and mutual benefit,” Huang wrote.

Despite their unhappiness with Washington, not all countries are interested in linking up with China, especially those with a history of disputes with Beijing.

“We speak for ourselves, and Australia’s position is that free and fair trade is a good thing,” Australian Prime Minister Anthony Albanese told reporters. “We engage with all countries, but we stand up for Australia’s national interest and we stand on our own two feet.”

China imposed a series of official and unofficial trade barriers against Australia in 2020 after the government angered Beijing by calling for an independent inquiry into the COVID-19 pandemic.

India has also reportedly turned down a Chinese call for cooperation, and Russia, typically seen as China’s closest geopolitical partner, has been left out of the Trump tariffs altogether. Taiwanese Foreign Minister Lin Chia-lung said on Wednesday that his government is preparing for talks on tariffs with the U.S.

The U.S. imposed a 32% tariff on imports from Taiwan, a close trading and security partner. Taiwan produces most of the high-performing computer chips craved by the U.S. and others and has long enjoyed a trade surplus with Washington.

Yet, Southeast Asian nations such as Vietnam and Cambodia find themselves in a particular bind. They benefited when factories moved to their countries from China due to rising costs. They are being hit by punishing tariffs but have few buyers outside the U.S. and are already operating on razor-thin margins.

Trump had previously denied contemplating a pause, but the drama over his tariffs will continue as the administration prepares to engage in country-by-country negotiations. Meanwhile, tariffs will be 10% for the countries where the larger ones were paused.

It’s not clear what further steps China will take, but the Foreign Ministry’s Lin said China “will not sit idly by and let the legitimate rights and interests of the Chinese people be deprived of, nor will we allow the international trade rules and multilateral trading system to be undermined.” Non-tariff options include bans on American movies, American law firms and other trade in services.

World markets soared on Thursday, with Japan’s benchmark jumping more than 9%, as investors welcomed Trump’s decision Germany’s DAX initially gained more than 8%. It was up 7.5% at 21,141.53 a bit later, while the CAC 40 in Paris gained 7.2% to 7,360.23. Britain’s FTSE 100 surged 5.4% to 8,090.02.

However, U.S. futures edged lower and oil prices also declined. Chinese shares saw more moderate gains, given yet another jump in the tariffs each side is imposing on each others’ exports.

The future for the S&P 500 was down 0.4% while that for the Dow Jones Industrial Average edged 0.2% lower.

Associated Press reporters Rod McGuirk in Sydney and Kanis Leung in Hong Kong contributed to this report.

BEIJING (AP) — China said Tuesday it would “fight to the end” and take countermeasures against the United States to safeguard its own interests after President Donald Trump threatened an additional 50% tariff on Chinese imports.

The Commerce Ministry said the U.S.‘s imposition of “so-called ‘reciprocal tariffs’” on China is “completely groundless and is a typical unilateral bullying practice.”

China, the world’s second-largest economy, has taken retaliatory tariffs and the ministry hinted in its latest statement that more may be coming.

“The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate,” the ministry said.

“The U.S. threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US. China will never accept this. If the US insists on its own way, China will fight to the end,” it added.

Trump’s threat Monday of additional tariffs on China raised fresh concerns that his drive to rebalance the global economy could intensify a financially destructive trade war. Stock markets from Tokyo to New York have become more unstable as the tariff war worsens.

Trump’s threat came after China said it would retaliate against U.S. tariffs he announced last week.

“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”

If Trump implements his new tariffs on Chinese products, U.S. tariffs on Chinese goods would reach a combined 104%. The new taxes would be on top of the 20% tariffs announced as punishment for fentanyl trafficking and his separate 34% tariffs announced last week. Not only could that increase prices for American consumers, it could also give China an incentive to flood other countries with cheaper goods and seek deeper relationships with other trading partners, particularly the European Union.

Trump frequently bragged about stock market gains during his first term, and the threat of losses on Wall Street was viewed as a potential guardrail on risky economic policies in his second term. But that hasn’t been the case, and Trump has described days of financial pain as necessary.

“I don’t mind going through it because I see a beautiful picture at the end,” he said.

Trump officials have frequently appeared on television to make the case for his policies, but none of their explanations has calmed the markets. The only improvement came from a false report that top economic adviser Kevin Hassett said Trump was considering a pause on all tariffs except for China. Stock prices spiked before the White House denied it was true by calling the post “fake news.”

China is one of the U.S.’s top trading partners, especially for consumer goods, and the tariffs — essentially a tax on imports paid by U.S. companies — will eventually be passed on to the consumer.

European Commission President Ursula von der Leyen said the European Union would focus on trade with other countries besides the United States, saying there are “vast opportunities” elsewhere.

U.S. total goods trade with China were an estimated $582 billion in 2024, making it the top trader in goods with the U.S. The 2024 deficit with China in goods and services trade was between $263 billion and $295 billion.

In Hong Kong, where stocks were slightly higher Tuesday, Chief Executive John Lee blasted the latest U.S. tariffs as “bullying,” saying the “ruthless behavior” has damaged global and multilateral trade and brought great risks and uncertainties to the world.

Lee said the city would link its economy closer to China’s development, sign more free trade agreements, attract more foreign companies and capital to Hong Kong, and support local enterprises in coping with the impact of the tariffs.

Associated Press writers Chris Megerian and Josh Boak in Washington, Christopher Bodeen in Taipei, Taiwan, and Kanis Leung in Hong Kong contributed to this report.

BANGKOK (AP) — Asian markets and U.S. futures tumbled Thursday following U.S. President Donald Trump’s announcement of big increases in tariffs on imports of goods from around the world.

Tokyo’s Nikkei 225 index dipped more than 3.4%, but recovered slightly. It was down 2.9% at 34,699.52.

Trump said he was imposing a 24% “reciprocal tariff” on Japan, one of the United States’ closest allies.

South Korea, also an ally, was hit with a 25% tariff. Its benchmark Kospi slumped 1.9% soon after the opening, to 2,459.30.

In Australia, the S&P/ASX 200 fell 1.8% to 7,793.10.

The future for the S&P 500 dropped 3% while that for the Dow Jones Industrial Average lost 2%, auguring potential losses when U.S. markets reopen on Thursday.

On Wednesday, U.S. stocks whipped through another dizzying day before Trump’s unveiling of his “Liberation Day” tariffs.

The S&P 500 rose 0.7% to 5,670.97 after careening between an earlier loss of 1.1% and a later gain of 1.1%. It’s had a pattern this week of opening with sharp drops only to finish the day higher.

The Dow Jones Industrial Average added 0.6% to 42,225.32, and the Nasdaq composite climbed 0.9% to 17,601.05.

Elon Musk’s Tesla helped knock the market around after initially falling more than 6% following a report that it delivered fewer electric vehicles in the first three months of the year than it did in last year’s first quarter. It closed 5.3% higher.

Tesla is one of Wall Street’s most influential stocks because of its immense size, and it’s faced backlash due to anger about CEO Elon Musk’s leading the U.S. government’s efforts to cut spending.

On Wall Street, Newsmax fell 77.5% in its third day of trading to give back some of the meteoric gains from its debut at the start of the week. It surged 735% Monday and then another 179% on Tuesday.

Several airlines, meanwhile, flew higher to recover some of the sharp losses taken recently on worries that tariff-weary customers will fly less. United Airlines climbed 4.6%.

Financial markets around the world have broadly been shaky lately because of uncertainty about Trump’s trade war. He has said he wants tariffs to make the global system more fair and to bring manufacturing jobs back to the United States from other countries. But tariffs also threaten to grind down growth for the U.S. and other economies, while worsening inflation when it may be stuck above the Federal Reserve’s 2% target.

After the U.S. market closed, Trump declared a 10% baseline tax on imports from all countries and higher tariff rates on dozens of nations that run trade surpluses with the United States. The president held up a chart while speaking at the White House, showing the United States would charge a 34% tax on imports from China, a 20% tax on imports from the European Union, and 32% on Taiwan.

Trump earlier announced 25% tariffs on auto imports; levies against China, Canada and Mexico; and expanded tariffs on steel and aluminum. Trump has also put tariffs against countries that import oil from Venezuela and plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.

Treasury yields swung in the bond market, echoing the indecision seen in the stock market.

The yield on the 10-year Treasury fell as low as 4.11% in the morning from 4.17% late Tuesday and from roughly 4.80% early this year. But it later rose to 4.18%. Higher yields can indicate higher expectations for the economy or for inflation.

In other dealings early Thursday, U.S. benchmark crude plunged $2.08 to $69.63 per barrel. Brent crude, the international standard, gave up $2.06 to $72.89 per barrel.

The dollar fell to 148.07 Japanese yen from 149.28 yen. The euro rose to $1.0897 from $1.0855.

AP Business Writers Stan Choe and Matt Ott contributed.

MEXICO CITY (AP) — The sweeping new tariffs announced Wednesday by U.S. President Donald Trump were met initially with measured reactions from key trading partners, highlighting the lack of appetite for a full-fledged trade war.

The fact that the tariffs fell most heavily on parts of the world sleeping through the night appeared to at least temporarily delay some of the potential outrage.

Trump presented the import taxes, which he calls “reciprocal tariffs” and range from 10% to 49%, in the simplest terms: the U.S. would do to its trading partners what he said they had been doing to the U.S. for decades.

“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.”

The president promised that “Jobs and factories will come roaring back into our country.” He framed it not just as an economic issue, but a question of national security that threatens “our very way of life.”

Shortly after Trump’s announcement, the British government said the United States remains the U.K.’s “closest ally.”

Business Secretary Jonathan Reynolds said the U.K. hoped to strike a trade deal to “mitigate the impact” of the 10% tariffs on British goods announced by Trump.

“Nobody wants a trade war and our intention remains to secure a deal,” said Reynolds. “But nothing is off the table and the government will do everything necessary to defend the U.K.’s national interest.”

British officials have said they will not immediately retaliate, an approach backed by the Confederation of British Industry, a major business group.

Italy’s conservative Premier Giorgia Meloni described the new 20% tariffs against the European Union as “wrong,” saying they benefit neither side.

“We will do everything we can to work towards an agreement with the United States, with the aim of avoiding a trade war that would inevitably weaken the West in favor of other global players,” Meloni said in a Facebook post. “In any case, as always, we will act in the interest of Italy and its economy, also by discussing with other European partners,” she added.

Some countries took issue with the White House’s calculations.

Australian Prime Minister Anthony Albanese said the U.S. tariffs imposed on his country were totally unwarranted, but Australia will not retaliate.

“President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10%,” said Albanese. The U.S. and Australia have a free trade agreement and the U.S. has a $2-to-$1 trade surplus with Australia. “The administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend.”

Trump said the United States bought $3 billion of Australian beef last year, but Australia would not accept U.S. beef imports. Albanese said the ban on raw U.S. beef was for biosecurity reasons.

New Zealand also took issue with Trump’s tariff logic.

Trade minister Todd McClay rejected the figure on the administration’s chart about the tariffs New Zealand imposes and said he had asked his country’s officials to clarify it.

“We don’t have a 20% tariff rate,” he said, adding that New Zealand was “a very low tariff regime” and the correct figure was below the 10% baseline rate applied by the U.S. to all countries.

“We won’t be looking to retaliate. That would put up prices on New Zealand consumers and it would be inflationary,” he said.

Spared for the moment from the latest round of tariffs were Mexico and Canada, so far as goods that already qualified under their free trade agreement with the United States. Yet, the previously announced 25% tariffs on auto imports were scheduled to take effect at midnight.

Mexico President Claudia Sheinbaum said Wednesday she would wait to take action on Thursday when it was clear how Trump’s announcement would affect Mexico.

“It’s not a question of if you impose tariffs on me, I’m going to impose tariffs on you,” she said in a news briefing Wednesday morning. “Our interest is in strengthening the Mexican economy.”

Canada had imposed retaliatory tariffs in response to the 25% tariffs that Trump tied to the trafficking of fentanyl. The European Union, in response to the steel and aluminum tariffs, imposed taxes on 26 billion euros’ worth ($28 billion) of U.S. goods, including bourbon, prompting Trump to threaten a 200% tariff on European alcohol.

As Trump read down the list of countries that would be targeted Wednesday, he repeatedly said he didn’t blame them for the tariffs and non-tariff barriers they imposed to protect their own nations’ businesses. “But we’re doing the same thing right now,” he said.

“In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,” Trump said.

Speaking from a business forum in India, Chilean President Gabriel Boric warned that such measures, in addition to causing uncertainty, challenge the “mutually agreed rules” and the “principles that govern international trade.”

Ultimately, Trump announced Chile would face the baseline reciprocal tariff of 10%. The U.S. is Chile’s second most important trading partner after China.

Analysts say there’s little to be gained from an all-out trade war, neither in the United States or in other countries.

“Once again, Trump has put Europe at a crossroads,” said Matteo Villa, senior analyst at Italy’s Institute for International Political Studies.

“If Trump really imposes high tariffs, Europe will have to respond, but the paradox is that the EU would be better off doing nothing,” he added.

Villa also noted that retaliation would certainly be a further “blow” to the United States, but it would hurt Europe even more, as the EU bloc depends more on exports to the U.S. than vice versa.

“On the other hand, Trump seems to understand only the language of force, and this indicates the need for a strong and immediate response,” Villa said. “Probably the hope, in Brussels, is that the response will be strong enough to induce Trump to negotiate and, soon, to backtrack.”

AP journalists around the world contributed to this story.

WASHINGTON (AP) — The leaders of both Canada and Mexico got on the phone with President Donald Trump this past week to seek solutions after he slapped tariffs on their countries, but China’s president appears unlikely to make a similar call soon.

Beijing, which unlike America’s close partners and neighbors has been locked in a trade and tech war with the U.S. for years, is taking a different approach to Trump in his second term, making it clear that any negotiations should be conducted on equal footing.

China’s leaders say they are open to talks, but they also made preparations for the higher U.S. tariffs, which have risen 20% since Trump took office seven weeks ago. Intent on not being caught off guard as they were during Trump’s first term, the Chinese were ready with retaliatory measures — imposing their own taxes this past week on key U.S. farm imports and more.

“As Washington escalates the tariff, Beijing doesn’t see other options but to retaliate,” said Sun Yun, director of the China program at the Stimson Center, a Washington-based think tank. “It doesn’t mean Beijing doesn’t want to negotiate, but it cannot be seen as begging for talks or mercy.”

As the world’s second-largest economy, China aspires to be a great power on both the regional and global stage, commanding respect from all countries, especially the United States, as proof that the Communist Party has made China prosperous and strong.

After the U.S. this past week imposed another 10% tariff, on top of the 10% imposed on Feb. 4, the Chinese foreign ministry uttered its sharpest retort yet: “If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”

The harsh rhetoric echoed similar comments in 2018, when Trump launched his first trade war with China and it scrambled to line up tit-for-tat actions. Beijing’s leaders have since developed a toolkit of tariffs, import curbs, export controls, sanctions, regulatory reviews and measures to limit companies from doing business in China.

All are designed to inflict pain on the U.S. economy and businesses in response to the American measures.

That allowed the Chinese government to react swiftly to Trump’s recent across-the-board doubling of new tariffs on Chinese goods by rolling out a basket of retaliatory measures, including taxing many American farm goods at up to 15%, suspending U.S. lumber imports and blacklisting 15 U.S. companies.

Beijing showed restraint in its response to leave room for negotiation, analysts say.

Xi Jinping’s leadership of the ruling Communist Party spans both of Trump’s terms, giving Beijing more continuity in its planning. He is the one who decided it’s not yet time to speak with Trump, said Daniel Russel, vice president for international security and diplomacy at the Asia Society Policy Institute.

“That’s not a scheduling issue, it’s leverage for China,” said Russel, who previously served as the assistant secretary of state for East Asian and Pacific Affairs. “Xi won’t walk into a call if there’s a chance he’ll be harassed or humiliated and for both political and strategic reasons, Xi won’t play the role of a supplicant.”

“Instead, China is hitting back promptly — but judiciously — to each set of tariffs,” Russel said.

At his annual press conference Friday, Chinese Foreign Minister Wang Yi said that “no country should fantasize that it can suppress, contain China while developing good relations with China.”

“Such two-faced acts not only are bad for the stability of bilateral relations but also will not build mutual trust,” Wang said. He added that China welcomes cooperation with the U.S., but noted that “if you keep pressuring, China will firmly retaliate.”

Scott Kennedy, a trustee chair in Chinese business and economics at the Washington-based Center for Strategic and International Studies, said the Chinese this time are “not psychologically shocked” by Trump’s “shock-and-awe” tactics.

“They’ve seen this before,” Kennedy said. “These are the kind of things that they’ve anticipated.”

China’s economy has slowed but is still growing at nearly a 5% annual pace, and under Xi, the party is investing heavily in advanced technology, education and other areas. It has stronger trade ties with many other countries than during Trump’s first term and has diversified where it gets key products, for example, buying most of its soybeans from Brazil and Argentina instead of the U.S.

In turn, the percentage of Chinese goods sold to the U.S. has fallen.

“They are better prepared to absorb the effect of the shocks, compared to several years ago,” Kennedy said.

Meanwhile, more than 80% of Mexico’s exports go to the U.S., and Canada sends 75% of its exports here.

China has learned from its previous dealings with Trump, Russel said. Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum are facing a reversal of Trump’s previous trade policies, with tariffs imposed and then postponed twice on at least some goods.

“Beijing has seen enough to know that appeasing Trump doesn’t work,” Russel said. In the first go-around, Trudeau and Sheinbaum “bought a little time, but the pressure only came roaring back stronger.”

Trudeau flew to Mar-a-Lago to meet Trump in December after the president-elect threatened tariffs. But in announcing retaliatory tariffs Tuesday, Trudeau sternly warned: “This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners.”

Sheinbaum also has said that “no one wins with this decision.”

MEXICO CITY (AP) — Mexico’s president said Tuesday the country will respond to the 25% tariffs imposed by the United States with retaliatory tariffs on U.S. goods, with details to come.

Mexico will announce the targeted products and other measures Sunday at an event in Mexico City’s central plaza, a delay that suggests Mexico hopes to de-escalate the trade war set off by U.S. President Donald Trump.

President Claudia Sheinbaum said the government is “going to wait” because she had planted to speak to Trump this week. Mexico’s government has said since January it had a plan ready for this scenario.

“There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Sheinbaum added.

China and Canada responded immediately with measures Tuesday.

Hours later, after stock markets took a hit, U.S. Secretary of Commerce Howard Lutnick said in a video posted to X that he was on the phone “all day” with Mexican and Canadian authorities.

Lutnick said it appeared the government was going to “work something out” with the trade partners, a deal that could be announced on Wednesday.

“It’s not going to be a pause. None of that pause stuff,” he said. “Somewhere in the middle will likely be the outcome.”

Some 80% of Mexico’s exports go to the United States, part of more than $800 billion in trade between the countries last year.

Sheinbaum called “offensive, defamatory and without support” the White House allegations that Mexican drug traffickers persist because of “an intolerable relationship” with the Mexican government. Trump has said he’s targeting Mexico to force it to crack down on migrants and drugs entering the U.S.

She listed the achievements of her young administration against Mexico’s drug cartels, including seizing more than a ton of fentanyl and dismantling 329 methamphetamine labs. She also noted that Mexico sent the U.S. 29 drug cartel figures it requested last week.

“It’s inconceivable that they don’t think about the damage this is going to cause to United States citizens and businesses,” Sheinbaum said. “No one wins with this decision.”

Mexico’s president also noted that Trump on Monday said he respected her, and she said she respected him as well: “The thing is finding a way to collaborate, of coordinating without subordinating anyone for the benefit of our people.”

Trade experts expressed doubt over how long Trump’s tariffs would last, saying they would boost prices for American consumers including Trump’s base.

“It is going to do nothing to help with the food inflation in the U.S.,” said Timothy Wise, an expert on agricultural trade between Mexico and the U.S. “I don’t see it as sustainable. I don’t find it plausible that corporate folks who surround Trump are going to sit back and allow him to destroy their foreign markets.”

Gabriela Siller, economic analyst with Mexican financial group Banco Base, said in the short term, the tariffs could boost inflation, disrupt economic trade flows and slow economic growth for both countries.

But as she watched the gradually falling Mexican peso, she also noted “the exchange rate and volatility have not skyrocketed, as the market speculates that the U.S. government could withdraw the tariffs soon.”

Mexico has the most to potentially lose in a trade war with the U.S., and economists say extended tariffs would plunge Mexico’s economy into a recession.

But for now, Sheinbaum’s approval ratings in Mexico are sky high. She has fanned nationalist sentiment since before Trump took office, frequently invoking Mexico’s sovereignty, promising it will negotiate from a position of equals and pushing back on Trump’s name change of the Gulf of Mexico to Gulf of America.

Sunday’s public event announcing Mexico’s retaliation will look to seize upon Sheinbaum’s popularity and the sense of national unity.

Still, that was little comfort to those whose livelihoods could be most affected.

At the U.S.-Mexico border, 58-year-old truck driver Carlos Ponce drove his truck packed with auto parts from Ciudad Juarez to El Paso, Texas, as he’s done for decades. But he and many others along the border were holding their breath.

“Things could change drastically,” said Ponce, who worried that transporters like him could lose their jobs or have to drive longer distances to marine ports as Mexican manufacturers look for other trading partners.

Long lines of trucks marked the Ciudad Juarez border crossing ahead of the tariffs.

“There’s a lot of things that aren’t defined yet and I’m sure they’ll be rapidly redefined,” said Alan Russell, the head of Tecma, an American company that helps manufacturing businesses set up shop in places like Ciudad Juarez.

He expressed doubt over Trump’s narrative that the tariffs would push American companies to return to the U.S. to set up factories: “Nobody is going to move their factory until they have certainty.”

Russell said just last week his company helped a new manufacturer that moved from North Carolina to Mexico because it was not able to find enough workers.

Manuel Sotelo, whose truck fleet moves products across the border every day, was shocked that tariffs went into effect after the steps Mexico’s president has taken to comply with U.S. demands to crack down on cartels and fortify the border. They include sending 10,000 troops to the border.

“Mexico made huge leaps and bounds,” said Sotelo, a Trump supporter who has a bobblehead doll of him on display in his office. “I really did think yesterday afternoon or last night Trump would have reversed course.”

WASHINGTON (AP) — President Donald Trump plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10% universal tariff charged on imports from China.

In a Truth Social post Thursday, Trump said illicit drugs such as fentanyl are being smuggled into the United States at “unacceptable levels” and that import taxes would force other countries to crack down on the trafficking.

“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” the Republican president wrote. “China will likewise be charged an additional 10% Tariff on that date.”

The prospect of escalating tariffs has already thrown the global economy into turmoil, with consumers expressing fears about inflation worsening and the auto sector and other domestic manufacturers suffering if Trump raises import taxes. But Trump has also at times engaged in aggressive posturing only to give last-minute reprieves, previously agreeing to a 30-day suspension of the Canada and Mexico tariffs that were initially supposed to start in February.

The threat of tariffs frightened the stock market with the S&P 500 index falling 1.6% on Thursday. The S&P 500 is now just 1.4% higher than it was after Trump won the election in November, giving up almost all of the gains that the president once cited as evidence of an economic revival.

Asked Thursday about the fact that tariffs are largely paid for consumers and importing companies, Trump dismissed any concerns by saying: “It’s a myth.” It’s possible for a stronger U.S. dollar to offset some of the costs of tariffs, but Trump’s statement goes against most economic modeling given the breadth of his planned taxes.

Trump intends to put 25% tariffs on imports from Mexico and Canada, with a lower 10% tax on Canadian energy products such as oil and electricity. The move, ostensibly about drug trafficking and immigration, led Mexico and Canada to respond by emphasizing their existing efforts to address these issues. Canada created a fentanyl czar, and Mexico sent 10,000 members of its National Guard to its border with the United States.

Mexican President Claudia Sheinbaum said Thursday that she hoped to speak with Trump after the Cabinet-level meetings occurring in Washington this week. Mexico’s Foreign Affairs Secretary Juan Ramón de la Fuente was scheduled to meet with Secretary of State Marco Rubio on Thursday afternoon.

Trump, “as you know, has his way of communicating,” Sheinbaum said. But she said that her government would stay “cool-headed” and optimistic about an agreement coming together to avoid the tariffs.

“I hope we are able to reach an agreement and on March 4 we can announce something else,” she said.

She said Mexico’s security chiefs were discussing intelligence sharing with their American counterparts that would allow for important arrests in the U.S. On the economic front, she said Mexico’s goal is to protect the free trade pact that was negotiated during the first Trump administration between Mexico and the United States. That 2020 deal, which included Canada, was an update of the North American Free Trade Agreement from 1994.

Canadian Prime Minister Justin Trudeau said his country has invested more than 1 billion Canadian dollars to improve border security, adding that his government’s ministers and officials are also in Washington this week.

“There is no emergency for the United States at the border with Canada when it comes to fentanyl, and that is exactly what we are demonstrating at this time,” Trudeau said in Montreal. “If the United States goes ahead and imposes tariffs, we already shared the details of our plan. We have $30 billion worth of U.S. products that will be subject to tariffs. And $125 billion of tariffs that will be applied three weeks later. But we don’t want to be in that position.”

Trump did impose a 10% tariff on China for its role in the manufacturing of chemicals used to make fentanyl, and that tax would now be doubled, according to his social media post.

On Thursday, China’s Commerce Minister Wang Wentao wrote to Jamieson Greer, the newly confirmed U.S. trade representative, that differences on trade should be resolved through dialogues and negotiations.

The 25% tariffs on Mexico and Canada would amount to a total tax increase on the U.S. public of somewhere between $120 billion to $225 billion annually, according to Jacob Jensen, a trade policy analyst at the American Action Forum, a center-right think tank. The additional China tariffs could cost consumers up to $25 billion.

The potential for higher prices and slower growth could create political blowback for Trump, who promised voters in last year’s presidential election that he could quickly lower the inflation rate, which jumped during Democratic President Joe Biden’s term. But Trump also campaigned on imposing broad tariffs, which he plans to launch on April 2 by resetting them to match the taxes that he determines are charged by other countries on American goods.

“The April Second Reciprocal Tariff date will remain in full force and effect,” Trump said as part of his new social media post.

In an interview with News Nation, Kevin Hassett, the director of the White House National Economic Council, said progress by Mexico and Canada on fentanyl “was not as impressive as the president had hoped.” There are significant differences between Canada and Mexico on the scale of drug smuggling. U.S. customs agents seized 43 pounds (19.5 kilograms) of fentanyl at the Canadian border during the last budget year, compared with 21,100 pounds (9,570 kilograms) at the Mexican border.

Hassett stressed that the reciprocal tariffs would be in addition to the ones being placed on Canada and Mexico.

Trump indicated Wednesday that European countries would also face a 25% tariff as part of his reciprocal tariffs. He also wants separate tariffs on autos, computer chips and pharmaceutical drugs that would be levied in addition to the reciprocal tariffs.

The president already announced that he’s removing the exemptions on his 2018 steel and aluminum tariffs, in addition to planning taxes on copper imports.

The prospect of a broader trade conflict should other nations follow through with their own retaliatory tariffs is already spooking U.S. consumers, potentially undermining Trump’s promise to unleash stronger economic growth.

The Conference Board reported on Tuesday that its consumer confidence index had dropped 7 points to a reading of 98.3. It was the largest monthly decline since August 2021, when inflationary pressures began to reverberate across the United States as the economy recovered from the coronavirus pandemic. Average 12-month inflation expectations jumped from 5.2% to 6% in February, the Conference Board noted.

“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,” said Stephanie Guichard, a senior economist at the Conference Board. “Most notably, comments on the current administration and its policies dominated the responses.”

Associated Press writers Didi Tang and Rob Gillies contributed to this report. Sanchez reported from Mexico City.

President Donald Trump said this week that tariffs on U.S. neighbors Canada and Mexico will arrive Saturday. The two nations are not only close geographically, but economically as well.

The business between the North American nations now exceeds China, totaling $1.8 trillion in 2023. That is far greater than the $643 billion in commerce that the U.S. did with China in that same year.

Following are just a few imported goods that could be hit first.

For decades, auto companies have built supply chains that cross the borders of the United States, Mexico and Canada. More than one in five of the cars and light trucks sold in the United States were built in Canada or Mexico, according to S&P Global Mobility. In 2023, the United States imported $69 billion worth of cars and light trucks from Mexico – more than any other country ― and $37 billion from Canada. Another $78 billion in auto parts came from Mexico and $20 billion from Canada. The engines in Ford F-series pickups and the iconic Mustang sports coupe, for instance, come from Canada.

“You have engines and car seats and other things that cross the border multiple times before going into a finished vehicle,’’ said Cato’s Lincicome. “You have American parts going to Mexico to be put into vehicles that are then shipped back to the United States.

“You throw 25% tariffs into all that, and it’s just a grenade.’’

In a report Tuesday, S&P Global Mobility reckoned that “importers are likely to pass most, if not all, of this (cost) increase to consumers.’’ TD Economics notes that average U.S. car prices could rise by around $3,000 – this at a time when the average new car already goes for $50,000 and the average used car for $26,000, according to Kelley Blue Book.

Canada is by far America’s biggest foreign supplier of crude oil. From January through November last year, Canada shipped the U.S. $90 billion worth of crude, well ahead of No. 2 Mexico at $11 billion.

For many U.S. refineries, there’s not much choice. Canada produces the “type of crude oil that American refineries are geared to process,’’ Lincicome said. “It’s a heavier crude. All the fracking and all the oil and gas we make here in the United States – or most of it – is a lighter crude that a lot of American refineries don’t process, particularly in the Midwest.’’

Trump said Thursday that he hasn’t yet decided whether to include Canadian and Mexico oil in the tariffs he still plans impose Saturday.

If he did tax Canadian oil imports, Lincicome said, “how the heck does that shake out? My guess is that it shakes out just through higher gas prices, particularly in the Midwest.’’ TD Economics figures that Trump’s tariffs could push up U.S. gasoline prices by 30 cents to 70 cents a gallon.

Tariffs would raise the price for those raising a glass of tequila or Canadian whisky.

In 2023, the U.S. imported $4.6 billion worth of tequila and $108 million worth of mezcal from Mexico, according to the Distilled Spirits Council of the United States, a trade group. The U.S. imported $537 million worth of Canadian spirits, including $202.5 million worth of whisky.

Canada and Mexico were also the second- and third-largest importers of U.S. spirits in 2023, behind the European Union, the council said.

The council said the U.S. is already facing a potentially devastating 50% tariff on American whiskey by the European Union, which is set to begin in March. Imposing tariffs on Mexico and Canada could pile even more retaliatory action on the industry.

Chris Swonger, the council’s president and CEO, said he appreciates the goal of protecting U.S. jobs. But tequila and Canadian whisky – like Kentucky bourbon ― are designated as distinctive products that can only be made in their country of origin.

“At the end of the day, tariffs on spirits products from our neighbors to the north and south are going to hurt U.S. consumers and lead to job losses across the U.S. hospitality industry, just as these businesses continue their long recovery from the pandemic,” Swonger said.

For American consumers still exasperated by high grocery prices, a trade war with Canada and Mexico could be painful. In 2023, the U.S. bought more than $45 billion in agricultural products from Mexico –including 63% of imported vegetables and 47% of fruits and nuts. Farm imports from Canada came to $40 billion. A 25% tariff could push prices up.

“Grocery stores operate on really tiny margins,’’ Lincicome said. “They can’t eat the tariffs … especially when you talk about things like avocados that basically all of them – 90% ― come from Mexico. You’re talking about guacamole tariffs right before the Super Bowl.’’

U.S. farmers are nervous, too, that Canada and Mexico will retaliate by slapping tariffs on American products such as soybeans and corn. That’s what happened in the first Trump administration. China and other targets of Trump tariffs hit back by targeting the president’s supporters in rural America. Exports of soybeans and other farm products dropped, so Trump spent billions of U.S. taxpayer money to reimburse farmers for lost sales.

“President Trump was as good as his word,’’ said Mark McHargue, a Central City, Nebraska, farmer who grows corn, soybeans, popcorn and raises hogs. “It did take the sting out of it. That’s for sure.’’ But he would prefer to see the government push to open foreign markets to American farm exports. “We would rather get our money from the market,’’ said McHargue, president of the Nebraska Farm Bureau. “It doesn’t feel great to get a government check.’’

Associated Press Writer Josh Boak in Washington contributed this story.

TORONTO (AP) — Two top Canadian Cabinet ministers are visiting Palm Beach to talk border security and trade with the incoming Donald Trump administration as Trump threatens tariffs on all Canadian products.

New Finance Minister Dominic LeBlanc and Foreign Minister Mélanie Joly will be in Palm Beach, Florida on Thursday for the talks this week, said Jean-Sébastien Comeau, a spokesman for LeBlanc.

LeBlanc said last week he would meet with Tom Homan, Trump’s incoming “border czar,” after Christmas to discuss Canada’s plan to secure the border as part of a bid to avoid the sweeping tariffs.

Comeau said LeBlanc and Joly “look forward to building on the discussions that took place when the Prime Minister met with President Trump at Mar-a-Lago last month, as well as the positive call the Ministers held with Mr. Tom Homan earlier this month.”

“The Ministers intend to focus on Canada’s efforts to combat fentanyl trafficking and illegal migration and the measures outlined in Canada’s Border Plan, as well as the negative impacts that the imposition of 25% tariffs on Canadian goods would have on both Canada and the United States,” Comeau added in a statement.

The Trump transition team did not immediately respond to a message seeking comment.

Trump keeps calling embattled Canadian Prime Minister Justin Trudeau the governor of the 51st state and has threatened to impose sweeping tariffs if Canada does not stem what he calls a flow of migrants and drugs in the United States — even though far fewer of each cross into the U.S. from Canada than from Mexico, which Trump has also threatened.

Canada has a billion-dollar plan to increase security at the border. LeBlanc last week he discussed parts of the plan with American officials and is optimistic, but said they have a lot of work ahead.

Trump has also made an issue of the U.S. trade deficit with Canada, erroneously calling it a subsidy.

Canada’s ambassador to Washington, Kirsten Hillman, has said the U.S. had a $75 billion trade deficit with Canada last year. But she noted a third of what Canada sells into the U.S. are energy exports and said there is a deficit when oil prices are high.

About 60% of U.S. crude oil imports and 85% of U.S. electricity imports are from Canada.

Nearly $3.6 billion Canadian dollars ($2.7 billion) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states.

Flows of migrants and seizures of drugs are vastly different at the U.S.’s two land borders. U.S. customs agents seized 43 pounds of fentanyl at the Canadian border during the last fiscal year, compared with 21,100 pounds at the Mexican border.

Most of the fentanyl reaching the U.S. — where it causes about 70,000 overdose deaths annually — is made by Mexican drug cartels using precursor chemicals smuggled from Asia.

On immigration, the U.S. Border Patrol reported 1.53 million encounters with migrants at the southwest border with Mexico between October 2023 and September 2024. That compares to 23,721 encounters at the Canadian border during that time.