President Donald Trump’s tariffs in Canada and Mexico aroused panic and convictions by US top trade partners, who said taxes would destroy North American economy and overthrow decades of integration.
Politicians, business leaders and trade associations in all three countries reacted with disbelief, warning that tariffs would bring about inflation, supply chain breakdown and widespread job losses.
On Saturday afternoon, Donald Trump signed an executive order imposing tariffs across 25 percent on Canadian and Mexican goods starting Tuesday and 10 percent energy fees. He also imposed an additional 10 percent fee for goods from China.
Trump said the tax will be placed in goods from Canada and Mexico to “keep them responsible” for promises to stop illegal drug leaks and migration at the US
Mexico President Claudia Sheinbaum announced tariffs on American goods in retaliation, while Canadian Prime Minister Justin Trudeau was expected to do the same later on Saturday.
New trade barriers would slow growth and accelerate inflation in all three countries for the coming years, with the biggest shock to Mexico and Canada, economists at the Peterson Institute for international economy estimated.
They will also increase decades of deepening integration in North America. Mexico and Canada send more than three -quarters of their exports to the US, supported by a three -way trade agreement, USMCA, signed during the latest Trump presidency.
“Tariffs will drastically increase the cost of everything for everyone: every day these fees are in the country, it damages families, communities and businesses,” said Candace Laing, President of the Canadian Chamber of Commerce.
US companies with operations across the region will be affected. The US Chamber of Commerce said the tariffs will disrupt the supply chains.
Trump has long focused his anger on the southern US border with Mexico, but he made it clear in the executive order that he sees Canada as part of the problem.
“Criminal networks are implicated in human trafficking and smuggling operations, enabling illegal illegal migration across our northern border,” the executive order.
Xavi Delgado of the Canada Institute at Wilson Center in Washington DC said the US never told Canada what actions to take on the northern border.
“The president can only implement tariffs through IEEPA (International Act of Emergency Economic Powers) in response to” unusual and extraordinary threat. an extraordinary threat;
Leaders in Mexico’s private sector said there was deep panic and irritability after Trump’s announcement. Many had hoped that the country would benefit from a second term Trump, with fewer trustworthy that he would follow his threats.
Pedro Casas Alatrist, director of the American Chamber of Commerce in Mexico, said the fees were a step back for a built relationship over the decades.
“Companies and consumers of the three economies will suffer consequences if this measure does not return; (meaning a) Increasing costs for manufacturers and exporters, loss of jobs, inflation and less purchasing power for our families,” he said .
Mexico’s economy is already slowing down and is expected to fall into recession if tariffs are set for a considerable period. Tiff Macklem, Governor of the Bank of Canada, has said US tariffs will also put Canada in a recession.
“The only winners from setting tariffs against Mexico and Canada from the United States are North America’s top American competitors,” Kenneth Smith, a former Mexican trade negotiator, said, adding that it damaged the reliability of the US as a trading partner.
The Mexicans were shocked by the language used on the White House fact sheet at tariffs, which accuses the government of Sheinbaum directly of having an “intolerable alliance” with drug cartels in the country. It was not clear what Mexico could do to lift the fees.
Since Trump was elected and began threatening tariffs in November, Canadian and Mexican delegations have tried to convince the president that such measures would also damage the US economy.
Some of Trump’s other Republicans have raised concerns about the president’s tariff announcement, pointing out Canada was their main trading partner.
John Llewelyn, a partner at Independent Economyics, a consultancy and a former economist at OECD, said the main consequence of tariffs would be inflation, with all countries likely to be injured, including SH.BA
“The 80-year era of stability in the rules and bringing economic and financial relations between countries ended today,” he said.
