US President Donald Trump has announced plans to impose 25% tariffs on imports from Mexico and Canada, with the implementation date set for February 1, 2025. This announcement came shortly after he was inaugurated, during which he expressed concerns about both countries allegedly failing to curb illegal immigration and drug trafficking into the United States, particularly the flow of fentanyl.

Trump accused Canada and Mexico of allowing "vast numbers of people" to enter the US, labelling Canada as a "very bad abuser" in this context. He stated, "We're thinking in terms of 25 percent on Mexico and Canada" due to these issues.

The proposed tariffs could potentially ignite a trade conflict among the signatories of the US-Mexico-Canada Agreement (USMCA), which governs approximately $1.8 trillion in goods and services trade. Both Canada and Mexico have indicated they would retaliate against American goods if these tariffs are enacted.

Following Trump's remarks, the US dollar strengthened against other major currencies, while both the Canadian dollar and Mexican peso fell by over 1% against the US dollar.

Responses From Canada And Mexico

In anticipation of these tariffs, Canadian officials have stated they are prepared to retaliate with their own tariffs on US goods. Canada has reportedly compiled a list of C$150 billion worth of US-manufactured items that could be targeted if necessary. The Canadian government emphasized its commitment to ongoing discussions about border security and mutual trade benefits with the US.

Conclusion

Trump's tariff proposal reflects his administration's broader strategy to leverage trade policy as a tool for addressing immigration and drug-related concerns. As both Canada and Mexico prepare for potential repercussions, this situation underscores the complexities of international trade relations within North America.

ANI