News Digest: Trump fires first tariff salvo
November 27, 2024
News Digest:
US President-Elect Donald Trump fired his first tariff salvo on Nov 25th over his Truth Social network, promising to impose a 25% tariff on imports from Canada and Mexico until they clamp down on drugs, particularly fentanyl, and migrants crossing the border.
In a move that is likely to have far-reaching impact on the two economies, particularly Mexico, Trump also outlined “an additional 10% tariff, above any additional tariffs” on imports from China.
According to Reuters, more than 83% of exports from Mexico and 75% of Canadian exports go to the US. The tariffs if implemented spell trouble for many Asian auto and electronics manufacturers that use Mexico as a low-cost production gateway for the U.S. market.
The punishing tariffs, if enacted, could wreak havoc on America’s supply chains and industries reliant on goods from the country’s closest trading partners.
“The measures proposed this evening could hit a number of strategic US industrial sectors hard, add approximately $272 billion a year to tax burdens, raise goods prices, lift interest rates, and sap strength in an already-vulnerable household sector,” said Karl Schamotta, chief market strategist at Corpay Cross-Border Solutions as reported by CNN