Table of Contents
Canada And Mexico trade war won’t start at midnight
It was a day with a trade war looming.
President Donald Trump had promised to impose, after midnight Tuesday, 25% tariffs on imports from Canada and Mexico.
But last-minute telephone diplomacy changed that.
The leaders of America’s two largest trading partners, Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, agreed to various measures to increase border security and to combat drug trafficking.
These measures prompted Trump to agree to a 30-day delay on imposing his tariffs.
Right now, it is just a delay. A trade war still looms.
And at 00.01 EST (05.01 GMT), Trump is still expected to move ahead with imposing a 10% tariff on Chinese imports.
We now put our live coverage on hold, and will resume should any major developments arise.
What took place today?
A significant day has unfolded in United States politics. Below is a summary of the key developments in this matter:
On Monday, US President Donald Trump announced a suspension of the proposed 25% tariffs on Canada and Mexico, which were set to be implemented within 24 hours.
This suspension, intended to last for 30 days, followed several discussions between Trump and Canadian Prime Minister Justin Trudeau, as well as Mexican President Claudia Sheinbaum.
In response to the negotiations, both Canada and Mexico have committed to enhancing border security measures aimed at reducing illegal immigration and drug trafficking, which are critical issues for the Trump administration. As part of this agreement, Canada will designate a “fentanyl tsar,” while Mexico will deploy 10,000 troops to its border.
Meanwhile, a 10% increase in tariffs on imports from China remains scheduled to take effect at 00:01 EST (05:01 GMT).
BBC
Families and businesses are left ‘in the lurch’ by the tariff stop, warn Canadian CEO
Candace Laing, the president and CEO of the Canadian Chamber of Commerce, asserts that the current suspension of tariffs will facilitate essential diplomatic efforts.
“A 30-day postponement allows additional time for Canadian businesses and government officials to emphasize that imposing tariffs is illogical between two of the closest allies in the world,
Laing underscores that this pause offers only temporary comfort, as the persistent threat of tariffs creates “uncertainty” and leaves both businesses and families “in a precarious situation.”
“This is not a situation we wish to navigate when the livelihoods of many depend on our established relationships with the United States,” Laing remarked, noting that $3.6 billion (£2.9 billion) is at stake each day.
Will not feel secure until tariffs are permanently revoked from consideration.”
BBC Spoken Person
‘Chaotic’ Trump disturbs Canadians, a politician claims
Andrew Furey, the Premier of Newfoundland and Labrador, expressed that Canada is experiencing “A sigh of relief from all people ” following the postponement of tariffs by Trump.
However, he cautions that the threat of a trade war still exists and urges Canadians to brace themselves for any future actions from Trump, whom he describes as “irrational” and “chaotic.”
Furey notes that Canadians are left feeling somewhat perplexed by the actions of their closest ally and largest trading partner.
He acknowledges that Canadians share Trump’s concerns regarding border security and the fight against fentanyl, but they believe that jeopardizing the economies of both nations is not a viable solution.
“There is a strong determination among Canadians,” Furey states, “and we view this not only as an economic challenge but also as a potential threat to our Self-government and our core values.”
Did Trump win in disrupting trade?
President Trump’s assertive approach towards the United States’ key trading partners seems to have yielded positive results, as both Mexico and Canada have consented to enhanced border security measures and are taking significant actions to combat fentanyl trafficking.
This tactic of utilizing the strength of the US economy to extract concessions from other nations marks a victory for Trump’s “America first” policy, enabling him to address vital domestic concerns without imposing the burdens of a continental trade conflict on American consumers.
“Tariffs are incredibly influential, both in economic terms and in achieving your broader objectives,” he remarked to reporters in the Oval Office on Monday. “When you hold the key advantage, tariffs become a powerful tool, and they will contribute to making our nation prosperous once more.”
Trump’s approach to tariffs is not unprecedented. His imposition of tariffs on steel and aluminum during his initial term faced criticism from Mexico, Canada, and the European Union, although economists suggest those actions were more narrowly focused.
Currently, Trump has indicated intentions to implement extensive tariffs on imports from Mexico, Canada, and China, with a 10 percent tariff increase on Chinese goods scheduled for Tuesday.
However, the successes of today may carry potential risks for the future.
After the 30-day period ends, it is still unresolved if Trump will follow using on his threats against Canada and Mexico. This lack of clarity could lead to businesses reducing their reliance on U.S. markets, delaying investments in new facilities, or delaying hiring until the trade situation becomes more clear.
BBC
How could Trump attempt to make up for the tariffs’ costs?
Economists have consistently argued that tariffs contribute to inflation, leading to increased retail prices.
However, some advisors to President Trump contend that certain aspects of his administration’s policies, particularly those aimed at reducing energy costs, may mitigate these inflationary effects.
In pursuit of this goal, the newly appointed Interior Secretary Doug Burgum has enacted a series of directives intended to “lower living expenses for American households.”
In addition to examining governmental strategies, there is a significant emphasis on enhancing energy production and decreasing energy costs, which represent a substantial expense for numerous businesses.
These initiatives are oriented towards long-term outcomes, and their effectiveness remains uncertain.
Adam Seminski, the former head of the US Energy Information Administration, recently remarked that while many presidents have attempted to address this issue, there is “no magic wand” capable of reducing energy prices.
After midnight, tariffs on Chinese imports will continue to take effect.
Tariffs on imports from China are anticipated to be implemented at 12:01 EST on Tuesday, following President Trump’s announcement over the weekend of a 10% tariff on goods imported from the nation.
In contrast, tariffs that were set to be enforced on products from Canada and Mexico have been temporarily suspended for a minimum of 30 days after Trump engaged in discussions with the leaders of these neighboring countries.
As of Monday, there have been no reported communications between Trump and the Chinese president; however, Trump indicated that he expects a conversation to occur “probably over the next 24 hours.”
He characterized the 10% import tariff as the “opening salvo” and suggested that the tariffs could become “very, very substantial” if an agreement is not reached. Analysts have interpreted this statement to imply that the tariffs may exceed the initial 10% rate.
BBC English
