Mexico city – On Saturday, President Trump struck oversized tariffs on goods from Mexico, Canada and China, sent shock waves through the global supply chain and triggered the fears of a disruptive trade war.
Trump signed Executive Order to record the tasks of 25% for imports from Mexico and Canada, with the exception of a 10% speed of the Canadian oil and 10% for all imports from China.
Managers from Mexico and Canada said that they were informed that the tariffs would come into force from Tuesday, a step that punished two of the top alleged America for what Trump described as their failure, the flow of migrants And stop drugs to the USA. He would tax Chinese products by 10%.
Each of the targeted countries has promised to take revenge with their own tariffs for American goods.
The three countries deliver the USA with food, medicine, oil, cars, wood and electronics and make up more than a third of the entire trade with the United States.
In 2014, employees work in a Honda car system in Celaya in the Central Mexican state of Guanajuato.
(Eduardo Verdugo / Associated Press)
The tariffs against Canada and Mexico are a trading pact that goes back three decades and have led to closely integrated industries across North America. Trump himself negotiated and signed the latest version of the agreement in his first term at that time praise The 2020 US Mexico-Canada Agree as “the most beautiful, most balanced and advantageous trade agreement that we have ever signed in the law”.
The tariffs threaten to deepen Mexico, Canada and China and to increase consumer prices in the USA
Experts say that some effects will feel considerably and quickly. American consumers will probably find higher prices for fresh vegetables and fruit and other perishable imports in a few days.
“Foreigners do not pay the tariffs, American companies and consumers,” said Jock O'Connell, a trading expert at Beacon Economics, a research company based in Los Angeles.
Consumers across the country are still wise after an increase in food prices after the pandemic. A high inflation was generally seen as an important factor in the choice of Trump, and the president promised to reduce prices for food and other goods. But these new tariffs are almost the opposite, say economists.
The United States imports more than $ 900 billion from Canada and Mexico, and a tariff of 25% is enormous because the goods have exceeded North American borders for many years.
“Has the Trump administration felt comfortable with the price of avocados and guacamole in front of the Super Bowl?” said Joseph Brusuelas, chief economist at the auditing company RSM US and added that he was not joking.
For many other products, prices can only increase if the inventory is exhausted. The prices for the cars will rise almost safely. The US car production is associated in Mexico and Canada, with the parts going across borders several times that analysts say that they are not really American cars, but North American cars.
The same applies to gas prices, especially in the Great Lakes and Rocky Mountain West that depend on Canadian oil. Trump has repeatedly talked about reducing gas prices, but the United States is still importing billions of dollars of crude oil – and increasing domestic production is not as easy or quick.
In September 2023, steam risks in the Suncor oil sand system near Fort McMurray, Canada.
(Victor R. Caivano / Associated Press)
The 10% tariffs in China will increase 10% to 25% tasks that Trump imposed on its first term for many Chinese imports and the former President Biden was held in place. Overall, this will large and entire American household pocket books, since China is such a large supplier of consumer items.
“The general effects of the president are in throwing a wrench into a strongly integrated continental economy,” said O'Connell.
He found that tariffs and counter -tariffs that remain in place for a while will slow down economic growth in all three countries.
As part of the USA-Mexico-Canada trade agreement, every country has the right to pull out at any time. And a US president can impose new tariffs without the approval of the congress by referring to the law on the international emergency management powers that authorize the executive measures to combat threats of national security, foreign policy or economy.
Trump warned for months that he was planning to impose tariffs for imports in order to attract production to the United States. When he campaigned before the elections in November, he swore at a point to charge a general tax of 10% or 20% for all goods in the USA, and threatened a tariff of 200% on vehicles from Mexico.
“Come and make your product in America,” he said to company in a speech in the World Economic Forum at the beginning of this year. If not, he said, “Then you just have to pay a tariff.”
But Trump also sees tariffs as a negotiation tactic to extract compromises in other nations in matters that have little to do with trade.
He described the tariffs in Mexico and Canada as retaliation because these countries have no longer contributed to preventing migrants and medication such as fentanyl from getting to the USA
However, many experts said that tariffs have the potential to promote more migration.
The economies in Mexico and Canada rely much more than the other way around, and the risk of tariffs has made the peso and the Canadian dollar very volatile in the past few weeks.
The value of exports and imports of Mexico is almost 90% of the country's gross domestic product, so World Bank data. Economists warn that even a small increase in tariffs that are determined in the United States are serious risks to the economy.
“In the worst case, the Mexican economy will get into a recession, the currency will reduce and inflation will increase,” says a report by the economic research company Moody's Analytics.
Analysts say that if the tariffs pull down the Mexican economy, more Mexican employees will try to enter the USA without adequate documentation.
Migrants make their way to a border patrol car after they had illegally crossed and waited to apply for two border walls and the United States on January 21st in San Diego asylum.
(Gregory Bull / Associated Press)
Evan Ellis, research professor for Latin American studies at the strategic studies institutes of the US Army War College, described the tariffs as a “catastrophic risk”.
“If you essentially be the Mexican economy essentially profound … there are people who will flow again across the US border,” he said.
The country's economy is already on shaky soil. Mexico faces his greatest budget deficit since the 1980s. Show data 36% of the population live in poverty With 7% in extreme poverty.
A severe recession in Mexico in the 1990s contributed to the fact that around 5 million Mexicans moved to the United States
The Mexican President Claudia Sheinbaum insisted that Mexico has a plan to counteract tariffs.
“We are prepared for every scenario,” she told journalists on Friday, although she said that Mexico “did everything in our power” to prevent tariffs. “What do we want? This dialogue with respect is here. “
Canadian officials have also promised an aggressive answer.
“To be smart means to avenge where it hurts,” said Chrystia Freeland, the former finance minister who represented Canada in the USMCA negotiations. “Our present must be dollar for dollars-and it must be precisely and painfully targeted: Florida Orange Growers, Wisconsin Dairy Farmers, Michigan Dishmasher manufacturer and much more.”
When China, Canada and Mexico take revenge by taking tariffs for American products in their markets, this will very likely slow down the trading volume. The Ripple effects will be felt in the entire supply chain and the business and employment in ports, warehouses and other logistics and transport mode will be violated.
A higher inflation of tariffs can come in Los Angeles, which come particularly hard shortly after the fires, which apparently increase prices for rents and other services and products.
“Timing couldn't be worse. It will make a double strike for Southern California, ”said Sung Won Son, Professor of Financial and Economics at the Loyola Marymount University.
During his first term, Trump raised tariffs from Mexico and other countries in 2018, which occurred to American agricultural goods and the tension of US Mexico relationships.
At that time he also threatened to do wider tariffs for all Mexican goods, but he finally withdrawn after the American economists had complained that they would hurt them, and his administration had a promise from the Mexican authorities to do more to do more, To prevent migrants from reaching the US limit.
Marcelo Ebrard, Mexican Economic Secretary, suggested last year that the only goal of tariffs is to achieve political profits in view of the strongly integrated global economy.
“The United States' economy is not a production industry,” said Ebrard. “And I'm sorry, but it won't be that way again.”
Linthicum from Albuquerque reports, Nm, And Lee reported from Washington.