Canada, Mexico and a few other countries may benefit from the US' new proposal.

Though the new tariffs have not been revealed as of yet, US President Donald Trump had said that steel products will face a 25% tariff, with 10% on aluminium goods, triggering tensions between the US and other partner nations.

Meanwhile, issuing a warning, China has said that it'll take necessary steps in any trade war with the US.

Chinese Foreign Minister Wang Yi has asked the US to be partners rather than rivals.

Trump, who has said that the 'relationship with China has been a very good one', has asked Beijing to develop a plan to reduce trade deficit with the US.

"China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!" the US President tweeted.

Meanwhile, the tariff measures could be signed on Thursday, White House press secretary Sarah Sanders told reporters.

"There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well based on that process. That would be [on] a case-by-case and country by country basis," she told reports.

Massive deficit

On Friday, Mar 2, Trump announced that he will implement reciprocal taxes to bridge the deficit the US is reeling under.

Reciprocal taxes will allow the US to charge the exact taxes that another country charges the North American nation.

"When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart. We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!" Trump tweeted.

On Wednesday, Mar 7, he said that other countries are taking advantage of US and blamed the former President of not doing enough to help the people of America.

"From Bush 1 to present, our Country has lost more than 55,000 factories, 6,000,000 manufacturing jobs and accumulated Trade Deficits of more than 12 Trillion Dollars. Last year we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again! #MAGA," he said.

Stock markets plunge

Trump's sudden announcement to increase tariffs has had a devastating effect worldwide.

Analysts have said that if the tariffs are implemented, it'll affect the American people in the long run, as prices of products will increase.

Sounding alert, the International Monetary Fund has said that there's no winner in a trade war and eventually everyone will suffer.

Countries such as Canada has said that if the US imposes the tariffs, it will retaliate 

Canadian Foreign Affairs Minister Chrystia Freeland called the move as "absolutely unacceptable".

Freeland said "responsive measures" will be taken if Canada is not exempted at the last minute.

She said: "It is entirely inappropriate to view any trade with Canada as a national security threat to the United States.  We will always stand up for Canadian workers and Canadian businesses.

"Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers,” Freeland added.

The decision has also riled Trump's own party workers.

White House economic advisor Gary Cohn, who is a strong supporter of free trade, resigned from his post earlier this week.

According to a CNN report, Trump and Cohn had a disagreement ever since the former decided to impose tax on trade.