Posted on 03 Mar 2025
US president Donald Trump says that the proposed 25% tariffs on imports from Canada and Mexico will go ahead as planned, while China will be charged an additional 10%.
If enacted, these tariffs are likely to fuel inflation across North America, as Mexico and Canada are the most important trading partners for the US, Kallanish learns. The supply chain of industries such as automotive sprawl across the three countries, with car parts crossing the borders multiple times before final assembly.
“The Detroit-3 [General Motors, Stellantis, and Ford] could cope in the short term through production shifts to the US, but permanent tariffs (however unlikely) could cause significant profit losses,” comments Tom Narayan, analyst at RBC Capital Markets.
In a post on his social media platform Truth, Trump writes that drugs such as fentanyl are “still pouring into our Country from Mexico and Canada at very high and unacceptable levels.” These drugs are made and supplied by China, he alleges.
The tariffs, which will be active from 4 March, had been put on hold for a month in early February to allow for negotiations between Washington and its two neighbours. Canada’s prime minister, Justin Trudeau, told reporters that the government is focused on avoiding tariffs.
“If on Tuesday there are unjustified tariffs brought in on Canada, we will have an immediate and strong response,” he added, noting that only 1% of fentanyl in the US comes from Canada, which is also affected by the crisis.
Mexican president Claudia Sheinbaum said on Thursday that secretary of economy Marcelo Ebrard and finance secretary Rogelio Ramirez were travelling to Washington to negotiate. She said that her government maintains a “cool head” and remains “optimistic” about the negotiations.
Beijing says it “deplores and opposes” the US move, and will retaliate if needed. Lin Jian, spokesperson of the country’s foreign affairs ministry, said Friday: “Pressure, coercion and threat is not the right way to deal with China… we urge the US to correct its wrongdoing and return to the right track of addressing each other’s concerns through equal-footed consultations.”
Source:Kallanish
