25% Tariffs on Canada and Mexico 👀

TRADE NEWS

Trump Targets Canada and Mexico with 25% Tariff Plan

President-elect Donald Trump unveiled plans to impose a 25% tariff on “all” imports from Canada and Mexico, citing concerns over illegal immigration and the influx of fentanyl into the United States. These tariffs, described as a bold economic strategy, aim to address cross-border challenges while increasing federal revenue. Trump characterized the move as a way to make Canada and Mexico “pay a very big price” for what he claims are failures to curb drug trafficking into the U.S.

The proposed tariffs have drawn significant attention due to their potential violation of the United States-Mexico-Canada Agreement (USMCA), a trade pact designed to ensure tariff-free commerce between the three nations. Critics warn that the measures could damage economic relations, lead to retaliatory actions, and disrupt industries reliant on North American trade. Economists caution that higher import costs could translate to increased prices for consumers, exacerbating inflationary pressures.

While the primary focus of the announcement is on Canada and Mexico, Trump also proposed a 10% tariff on Chinese imports. He criticized China for inadequate efforts to stop the production and export of fentanyl, despite tighter controls on chemicals used to manufacture the drug. The Chinese Embassy in Washington responded by emphasizing the benefits of mutual economic cooperation and warning against the fallout of a trade war.

Markets reacted swiftly to the announcement, with stock futures dipping and currencies such as the Australian dollar hitting new lows. Observers are now questioning how these tariffs will align with existing trade agreements and their broader impact on the global economy. Trump’s proposed measures mark a significant shift in US trade policy, setting the stage for heightened tensions with key trade partners.

Providing a Canadian perspective, the former President and CEO of the Canadian Chamber of Commerce shares his insights here.

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VIDEO OF THE DAY

How China Uses Mexico To Avoid US Tariffs

While on the topic of tariffs let’s take a look how Mexico surpassed China as the largest US importer in 2023 fueled by $475 billion in exports. Chinese companies are increasingly leveraging Mexico as a gateway to sidestep US tariffs, fueling growth in cross-border logistics and trade opportunities.

GLOBAL TRADE SNIPPETS

EU fleet records 3.3 million tonnes of fish in 2023. The EU's fishing fleet hauled 3.3 million tonnes of fish in 2023, reflecting efforts to balance sustainability with demand while addressing challenges in marine conservation and industry regulations.

BRICS explores transcontinental rail link through Bolivia and Brazil. China is evaluating the construction of a railway connecting the Pacific and Atlantic oceans, traversing Bolivia and Brazil. This initiative aims to enhance trade routes among BRICS nations.

China uncovers massive gold deposit in Hunan. China has announced the discovery of a significant gold deposit in Hunan Province, estimated to be worth approximately US$83 billion.

TRIVIA

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