Markets Shaken as Trump Announces Tariff Threats on Major Trade Partners
President-elect Donald Trump has made a startling announcement regarding his plans to impose substantial tariffs on America’s three largest trading partners. This news has sent shockwaves through international markets.
Trump has pledged to implement a 25% tariff on all imports from Mexico and Canada, and an additional 10% tariff on Chinese products. This policy is set to begin on his first day in office, as a response to concerns over illegal immigration and drug trafficking, particularly fentanyl.
The announcement immediately triggered currency volatility, with the Canadian dollar falling 1.2% against the US dollar and the Mexican peso dropping 2% before recovering some losses.
China’s embassy responded by stating that “no one will win a trade war,” while Mexican President Claudia Sheinbaum warned that tariffs would cause inflation and job losses for both countries.
The proposed tariffs would raise questions about the future of the US-Mexico-Canada Agreement (USMCA) and could significantly impact supply chains across industries. This is particularly true for automotive manufacturing where companies like General Motors and Ford saw their shares decline 9% and 2.5% respectively on the news.
Source: Al Jazeera