US President Donald Trump has declared that he would follow through on his threat to impose 25 percent tariffs on imports from both Canada and Mexico from February 1.
“I will be putting the tariff of 25 per cent on Canada and, separately, 25 per cent on Mexico. We will really have to do that because we have very big deficits with those countries. Those tariffs may or may not rise with time,” said the US President.
Trump elaborated on his decision to put tariffs on the two neighbouring countries, “We’ll be announcing the tariffs on Canada and Mexico for a number of reasons. Number one is the people that have poured into our country so horribly and so much.”
“Number two are the drugs, fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits,” he said.
The US President also indicated that he would proceed with tariffs on China. Though he didn’t specify the levy, he had previously said it would be 10 percent.
“With China I’m also thinking about something because they’re sending fentanyl into our country and because of that they’re causing us hundreds of thousands of deaths, so China is going to end up paying a tariff also for that and we’re in the process of doing that,” Trump told reporters.
“We’ll make a determination on what it’s going to be, but China has to stop sending fentanyl into our country and killing our people.”
Fentanyl is an opioid addictive drug far stronger than even heroin. It has been reportedly creating havoc in the USA with thousands of people succumbing to the overdose and other effects of the highly addictive drug.
The US maintains that these drugs are being smuggled across the border through its neighbouring nations Mexico and Canada while Trump is also of the view that China has been pushing and partaking in the drug trade destroying the US society at large. Trump is looking to put a full stop on the fentanyl trade in the entire region.
Oil Trade
Another conentious topic of discussion was the question of oil trade. The US president did suggest he was still considering if one significant import — oil — would be exempted. Trump said would be making a determination soon basing his decision upon the price of oil.
“We don’t need the products that they have. We have all the oil that you need. We have all the trees you need,” Trump said referring to major imports from Canada.
The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration. U.S. daily production during that month averaged nearly 13.5 million barrels a day.
“We don’t need what they have. For us to be subsidising Canada to the tune of USD 175 billion a year, and subsidising Mexico to the tune of USD 250 billion-USD 300 billion a year,” he said.
Meanwhile Canada and Mexico are bracing for the impact of 25% US tariffs on their respective economies. The Canadian dollar fell 0.4% during Asian market trading on Friday, while the Mexican peso slumped by 0.6% against the US dollar.
While both Canada and Mexico are expected to suffer heavily with these tariffs their leaders have so far remained defiant. Both nations have a great historical trade partnership with the US however they are not content with the way Trump has been attempting to push them to the wall. Mexico is already incensed by Trump’s immigrant deportations and renaming the Gulf of Mexico.
Colombia attempted to go head to head in a tariff war with the Trump administration however Bogota capitulated in no time. It is to be seen how long Canada and Mexico can hold on if Trump continues his tariff charge and how they hope to negotiate the devastating impact of the tariffs on their economies.
