President Donald Trump is poised to impose tariffs on Canada, Mexico, and China on February 1st, escalating trade tensions and prompting global economic uncertainty. Trump's administration argues that the tariffs are necessary to address illegal immigration and the flow of fentanyl from these countries. However, economists and analysts warn that the tariffs could have significant negative consequences for all parties involved.
An aerial view of the Mexican Grupo Modelo beer factory in Mexico City underscores the potential economic fallout from escalating trade tensions. Mexican President Claudia Sheinbaum expressed confidence that her nation could avert the looming 25 percent tariffs from US counterpart Donald Trump slated for February 1st.
With less than 24 hours before President Trump's deadline to impose sweeping tariffs on the three largest US trading partners - Canada, Mexico, and China - the global economy is bracing for impact.Shortly after assuming office this month, Trump declared his intention to impose 25% tariffs on neighboring Canada and Mexico on February 1st unless they took stringent measures against illegal migrants crossing the US border and the flow of deadly fentanyl. He further hinted at an additional 10% duty on Chinese goods as early as Saturday, citing similar concerns regarding fentanyl. On Thursday, he reaffirmed his commitment to these tariffs on all three countries. In a subsequent escalation, he renewed threats of 100% tariffs on BRICS nations - a bloc encompassing Brazil, Russia, India, China, and South Africa - should they attempt to establish a rival to the US dollar.Fentanyl, significantly more potent than heroin, has been implicated in tens of thousands of overdose deaths annually. Beijing has previously refuted allegations of its involvement in this deadly trade, while Canada has countered that less than one percent of undocumented migrants and fentanyl entering the US originates from its northern border. JPMorgan analysts posit that these tariff threats serve as a 'bargaining chip' to expedite the renegotiation of a trade pact between the US, Mexico, and Canada. However, they caution that potentially dismantling a decades-long free-trade area could inflict a substantial shock. A salient lesson from Trump's first term was the propensity for abrupt policy shifts and threats, they emphasize. Tariffs, levied by US businesses to the government on purchases from abroad, can ultimately burden importers, foreign suppliers, or consumers. Wendong Zhang, an assistant professor at Cornell University, asserts that Canada and Mexico would bear the brunt of a 25% US tariff, coupled with retaliatory measures from both nations. He projects a potential loss of 3.6% and 2% of real GDP for Canada and Mexico respectively, while the US could suffer a 0.3% real GDP decline.Blanket US tariffs and an equally retaliatory response from Ottawa could potentially plunge Canada into a recession this year, predicts Tony Stillo of Oxford Economics, adding that the US also risks a shallow downturn. The possibility of exceptions remains unclear, with Trump suggesting he would decide Thursday whether to include crude oil imports in tariffs on Canada and Mexico. Canada and Mexico together supply over 70% of US crude oil imports, with almost 60% originating from Canada alone, according to a Congressional Research Service report. Stillo highlights that heavy oil, exported by Canada, is refined in the US, and readily available substitutes are scarce. US merchandise imports from both countries predominantly enter duty-free or with minimal rates on average, according to the Peterson Institute for International Economics (PIIE). A tariff increase would shock both industrial buyers and consumers, spanning a wide range of products from machinery to fruits, as noted in a PIIE report. This week, Canadian officials announced that Ottawa would provide pandemic-level financial support to workers and businesses should US tariffs materialize. Prime Minister Justin Trudeau affirmed Wednesday that Ottawa is actively working to avert these levies and stands ready to implement a robust response.Trump's nominee for commerce secretary, Howard Lutnick, stated Wednesday that 'there will be no tariff' if Canada and Mexico addressed immigration and fentanyl concerns. Trump continues to contemplate fresh tariffs on Chinese goods, hinting at their implementation. White House spokeswoman Karoline Leavitt revealed this week that 'the president has said that he is very much still considering that for February 1st.' Beijing has vowed to safeguard its 'national interests,' and a foreign ministry spokeswoman previously warned that 'there are no winners in a trade war.' Isaac Boltansky of financial services firm BTIG anticipates 'incremental tariff increases' on Chinese goods, with consumer goods likely to face lower hikes. Boltansky suggests that Trump will oscillate between 'carrots and sticks' with China, ultimately aiming for a comprehensive agreement before the culmination of his term
TRUMP TARIFFS CANADA MEXICO CHINA TRADE WAR FENTANYL ECONOMY
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump's Tariff Threats: China Plays the Long GamePresident Trump's latest tariff threats against China highlight a deepening trade war. While the US aims to pressure Beijing, China's resilient economy and diversified trade network suggest a long game. The article explores the complexities of this trade war, its impact on US consumers, and the challenges faced by American businesses seeking alternatives to Chinese imports.
Read more »
China to intensify cooperation with BRICS despite Trump's threatsIn a bold stance against US pressure, China reaffirms its commitment to BRICS cooperation as US President Donald Trump threatens 100 percent tariffs over the bloc's currency plans. While Putin downplays immediate currency alternatives, Beijing emphasises the alliance's focus on mutual prosperity and global economic stability.
Read more »
Prof Karim refutes Trump's claims about World Health Organisation and ChinaProf Salim Abdool Karim refutes Trump's unfounded reasons for withdrawing the US from the WHO, citing a lack of evidence and political motivations.
Read more »
Donald Trump's $TRUMP Meme Coin Sparks Excitement and SkepticismDonald Trump's launch of $TRUMP meme coin has generated both enthusiasm and concern in the cryptocurrency market. The coin experienced a rapid surge in value upon its debut, reaching a market cap of nearly $5.5 billion. However, experts warn about its potential volatility and the risks associated with meme coins, citing past examples of sudden value drops and rug-pull schemes. While $TRUMP benefits from Trump's political prominence, its long-term sustainability remains uncertain.
Read more »
Melania Trump Returns to the White House, Trump Family Navigates Shifting DynamicsMelania Trump is set to return to the White House as First Lady, marking a change from her first term. She plans to actively engage in promoting her causes and overseeing state dinners. Meanwhile, the Trump family is transitioning, with Don Jr. staying with the Trump Organization, Ivanka Trump stepping back from politics, and Eric Trump continuing his work at the company. Tiffany Trump is expecting a baby and plans to remain out of the spotlight. Barron Trump, now 18, is emerging as an unofficial advisor to his father, while Jared Kushner will serve as an unofficial advisor on Middle Eastern affairs.
Read more »
Ramaphosa Congratulates Trump, South Africa Focuses on Investment at WEF Amidst Trump's Policy ShiftsThis article discusses President Cyril Ramaphosa's congratulations to newly re-elected President Donald Trump and South Africa's participation in the 2025 World Economic Forum (WEF) in Davos, Switzerland. It highlights President Ramaphosa's efforts to position South Africa as an attractive investment destination and Trump's return to the White House and his planned policy changes, which are generating significant discussion in Davos.
Read more »