Mint Primer | What Trump’s tariff order means for the world
Subscribe to enjoy similar stories. Two weeks into his second term, US president Donald Trump kept his word and slapped tariffs on imports from Canada, Mexico and China on 1 February. Mint looks at the fallout from this move on the affected nations and rest of the world.
Yes. Through an executive order, Trump, disregarding warnings by economists, businessmen, and diplomats, imposed 25% tariffs on all imports from Canada (except oil, which will suffer a 10% duty) and Mexico. Chinese products coming into the US will also face an additional 10% tariff.
Trump had invoked the International Emergency Economic Powers Act, which empowers him to impose immediate tariffs, citing a national emergency, to target three of Washington's biggest trading partners. The emergency, in this case, is the flow of drugs, especially Fentanyl, which is manufactured in China and is flooded into the US through its northern and southern borders. The tariffs, which come into effect on 4 February, are bad for all countries involved.
Canada, Mexico, and China account for as much as half of America's overall imports. These tariffs are expected to increase the prices of various products in the US, thus fuelling inflation. If sustained for a long time, they could slow down economic growth in the US and across the world.
Exports to the US account for 20% of Canadian GDP and 30% in the case of Mexico. Higher tariffs by the US could shave off 2% of their GDP in the next few years, experts warn. Canada has already retaliated and imposed a 25% tariff on imports from the US, aggregating Canadian $155 billion.
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