On Thursday, President Donald Trump announced a deferment of new tariffs on most imports from Mexico and Canada until April 2. This decision follows Canada’s strong countermeasures against Trump’s earlier imposition of 25% tariffs on goods from these vital trading partners, amidst rising economic concerns regarding a potential trade war.
Amidst growing economic apprehensions, the White House maintains that the tariffs aim to curb fentanyl smuggling. However, these tariffs have significantly jeopardised the long-standing North American trade relations, causing turmoil in stock markets and raising consumer fears. Despite postponing their implementation, Trump has reiterated his commitment to introduce ‘reciprocal’ tariffs on the original date.
While Trump offered these exemptions for imports compliant with the 2020 USMCA trade pact, 62% of Canadian imports could still face new tariffs. Similarly, half of non-compliant imports from Mexico would also be taxed. Furthermore, Trump made it clear that the 25% tariffs on automotive imports would not be extended.
Mexican President Claudia Sheinbaum plans to announce retaliatory measures to these tariffs but recognised progress made in curtailing illegal immigration and drug smuggling as a reason for the temporary reprieve. “I did this as an accommodation, and out of respect for President Sheinbaum,” Trump stated, showcasing a cooperative relationship.
The ongoing uncertainty stemming from Trump’s fluctuating tariff threats has created instability in financial markets and diminished consumer confidence, impeding business investment plans. Following the announcement, US stock markets showed slight recovery before plunging once more, with significant drops in the S&P 500 index.
Sheinbaum elaborated on the call with Trump, highlighting successful security measures taken by Mexico, including the significant reduction of fentanyl smuggling. Furthermore, she asserted that nearly all bilateral trade will remain exempt from tariffs until the April deadline.
In Canada, Ontario Premier Doug Ford announced plans to increase electricity pricing for American consumers in response to Trump’s tariffs, labelling the ongoing tariff threats as chaotic. “This whole thing with President Trump is a mess,” he remarked, stressing that Ontario’s position remains unchanged.
The U.S. remains vigilant in monitoring fentanyl overdose rates as a key indicator of Canada and Mexico’s compliance with the imposed conditions. Meanwhile, economists warn that Trump’s import duties might lead to inflated prices, slowed economic growth, and job losses. The Yale University Budget Lab predicts that these tariffs could lower disposable household income by $1,600 annually. Trump acknowledged the potential economic strain, stating, “There’ll be a little disturbance, but we’re okay with that. It won’t be much.”
US President Trump has delayed new tariffs on imports from Mexico and Canada until April 2, following aggressive countermeasures from Canada. While claiming to combat fentanyl smuggling, the tariffs have unsettled financial markets and consumer confidence. Trump’s plans for ‘reciprocal’ tariffs remain, raising concerns among businesses and economists about potential economic fallout.
In summary, President Trump has paused the implementation of new tariffs on imports from Mexico and Canada until April 2, amid economic uncertainty and countermeasures from Canada. Promising to uphold ‘reciprocal’ tariffs, Trump aims to tackle fentanyl smuggling while acknowledging the potential economic disruptions caused by such tariffs. The fluctuating tariff situation continues to stir concerns in the markets and amongst consumers, as repercussions on trade relations and consumer spending loom large.
Original Source: www.france24.com
