Donald Trump answers questions during a press conference. The photo is from September 6, 2024.
Following a statement by newly elected US President Donald Trump, the currencies of Canada, Mexico and China fell. According to the New York Times, the Mexican currency, the peso, weakened by 1.18% in one day against the dollar. At the same time, the Canadian currency weakened by 1% against the Canadian dollar and the US dollar. This is the largest drop in the Canadian currency since May 2020.
At the same time, China’s currency, the yuan, has also declined. However, it is low compared to Mexico and. The Chinese currency, the yuan, weakened by 0.3% against the dollar.
In fact, Trump announced that as soon as he was sworn in, he would impose heavy tariffs on goods arriving in America from Canada, Mexico and China. Trump said that unless these three countries control drugs and illegal immigrants, they will face the brunt of America’s high tariffs.
The highest tariffs will be imposed on China. Trump said in a social media post Monday that he would impose 25% tariffs on Canada and Mexico. He said that if Canada and Mexico want to, they can easily control illegal immigrants and the drug supply (fentanyl), but they don’t. For this reason, they will have to pay a heavy price.
At the same time, Trump announced that he would impose 35% tariffs on China. This is 10% more than those installed in Mexico and Canada. Trump said-
China illegally sends large quantities of drugs to America. I had also raised this issue with China earlier. Chinese authorities promised at the time that they would carry out the death penalty if drug traffickers were arrested, but they did not do so.
Trump’s Tariff War Will Increase Inflation. It is worth noting that America has a free trade agreement with Canada, Mexico and China. Under this, there are no customs duties on any type of import-export between these countries. During his last term, Trump signed the North American Free Trade Agreement (NAFTA) with Mexico and Canada.
If Trump imposes tariffs on these countries after taking office, it will be a violation of the agreement.
These three countries had purchased goods worth over $1 trillion (around Rs 85 lakh crore) from America in 2023. At the same time, over $1.5 trillion was sold. According to the report, Trump’s tariff war will have the greatest impact on the automobile, agriculture, technology and auto parts sectors. After the imposition of customs duties, the price of these products will increase.
China has declared that no one will win in the trade war. Chinese Embassy spokesperson in Washington Liu Pengyu said that last year there was a conversation between US President Joe Biden and Chinese President Xi Jinping. Measures have been taken to combat drug trafficking. But to say that China is deliberately supplying drugs like fentanyl to America is not correct.
Liu said China-US trade is beneficial to both countries. It must not be falsified. No one will win in a trade war.
Canada said it would discuss the issue with Trump. Canadian Prime Minister Justin Trudeau’s office released a statement saying Canada is needed for America’s energy supply. Last year, 60% of the oil used by the United States came from Canada. He will discuss these issues with the Trump team.
Mexican officials have not yet responded to Trump’s message. However, Trump has already threatened to impose tariffs on Mexico. In the final days of the election campaign, he threatened to impose tariffs of up to 100% on all goods from Mexico. Mexican officials then declared themselves ready to impose customs duties.
According to the report, Mexico could be the country that will suffer the most from Trump’s tariff war. This country is very dependent on America. It sells about 80% of its merchandise in the United States.
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