The president of Mexico, Claudia Sheinbaum, announced tariffs on US assets in retaliation, while the Canadian prime minister Justin Trudeau was expected to do the same later on Saturday.
The new commercial barriers would delay growth and accelerate inflation in the three countries over the next few years, with the largest clashes for Mexico and Canada, estimated at the Peterson Institute for the international economy.
They also volume decades of deepening integration in North America. Mexico and Canada send more than three quarters of their exports to the United States, backed by a three -way commercial agreement, USMCA, signed during Trump’s last presidency.
“Tariffs will drastically increase the cost of everything for all: every day these tariffs are in place, it hurts families, communities and companies,” said Candace Laing, president of the Canada Chamber of Commerce.
American companies with operations throughout the region will be affected. The United States Chamber of Commerce said rates would interrupt supply chains.
Trump has long focused his anger on the southern border of the United States with Mexico, but made clear in the executive order that sees Canada as part of the problem.
“Criminal networks are involved in traffic and smuggling operations, which allows Non Vettel illegal migration through our northern border,” says the executive order.
Xavi Delgado of the Canada Institute at the Wilson Center in Washington DC said that the United States never told Canada what actions should take on the northern border.
“The president can only implement tariffs through the Iieepa (International Law on Emergency Economic Powers) in response to an ‘unusual and extraordinary threat.’ Even if the White House believes that its commercial deficit with Canada is unfair, that does not constitute An extraordinary threat;
The leaders in the private sector of Mexico said there was deep panic and nervousness after Trump’s announcement. Many expected the country to benefit from a second term of Trump, and few believed that they would follow their threats.
Pedro Casas Alatriste, director of the US Chamber of Commerce in Mexico, said the tariffs were a step back for a relationship built for decades.
“Companies and consumers of the three economies will suffer consequences if this measure is not invested; (It means a) increase in costs for producers and exporters, loss of jobs, inflation and less purchasing power for our families, ”he said.
Mexico’s economy is already slowing down and is expected to fall into a recession if tariffs are imposed for a substantial period. Tiff Macklem, governor of the Bank of Canada, said that American tariffs would also probably put Canada in a recession.
“The only winners of the imposition of tariffs against Mexico and Canada by the United States are the main competitors in North America,” said Kenneth Smith, a former Mexican commercial negotiator, and added that he damaged the credibility of the United States as Commercial partner.
The Mexicans were surprised by the language used in the informative sheet of the White House in the rates, which accuses the Sheinbaum government directly from having an “intolerable alliance” with the country’s drug cartels. It was not clear what Mexico could do to eliminate tariffs.
Since Trump was elected and began threatening tariffs in November, Canadian and Mexican delegations have been trying to convince the president that such measures would also harm the economy of the United States.
Some of Trump’s republican colleagues have also raised concerns about the president’s tariff announcement, highlighting that Canada was his main commercial partner.
John Llewelyn, a partner of Independent Economics, a consulting and a former OECD economist, said that the main consequence of rates would be inflation, with all countries that are probably hurt, including the United States.
“The age of 80 years in the rules and behavior of economic and financial relations between countries ended today,” he said.
