Trump announces duties on Mexico, Canada and China: rising trade tensions
The president-elect said he wants to target countries he holds responsible for illegal immigration and drug trafficking. But one of the goals is the renegotiation of the North American Free Trade Agreement
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From our correspondent
NEW DELHI - US President-elect Donald Trump announced overnight tariffs of 25 per cent on all products imported from Mexico and Canada and a further 10 per cent on those coming from China, thus targeting his country's three main trading partners that alone are worth a third of everything the US trades with the rest of the world. The tariffs," Trump wrote in a series of posts on his social network Truth, "will be ratified as soon as he takes office in the White House and will remain in force until the countries in question stop the flow of illegal migration and drug trafficking into the US.
An announcement in open violation of the treaties
."On 20 January, in one of my first several executive orders, I will sign all the necessary documents to impose 25% tariffs on Mexico and Canada on ALL products entering the United States," Trump wrote, later calling the two countries' borders "ridiculous". The announcement, the most specific on trade since his election victory, appears to be in open violation of the Usmca, the free trade treaty between the US and the two neighbouring countries signed by Trump himself in 2020. According to William Reinsch, a former president of the US National Foreign Trade Council, Trump's threats could aim to renegotiate the treaty before July 2026, the stipulated date for reviewing its contents.
If Trump followed through on his threats, the duties would have a huge impact on the two neighbouring countries: more than 83% of the products exported from Mexico take the route to the US, while for Canada the figure is 75%. Immediately after the announcement, the dollar strengthened against the currencies of the two countries, with the peso losing 2% and slipping to its lowest level in a year and the Canadian dollar hitting its lowest level since May 2020.
Automotive paralysis risk
.Among the side effects of such high tariffs - net of retaliation and rising inflation in the US - is the risk of crippling a number of economic sectors, from food to automotive, since North American markets have been highly integrated for more than 30 years, with a large number of US companies dependent on Mexican and Canadian supply chains.
