It’s been a roller coaster month and a half for global trade with President Donald Trump in office. After campaigning on tariffs and promising to impose them, markets and business leaders mostly shrugged off the tariff threats as campaign bluster. But once in office, President Trump almost immediately began pushing tariff policies globally.
Canada and Mexico: Will there be tariffs next week?
We reported a few weeks ago that Trump was imposing tariffs on Canada and Mexico. Soon after, those tariffs were pushed back. At the same time, we reported on tariffs being imposed against China. Those tariffs actually went into, and have been in, effect for several weeks.
At the time tariffs against Canada and Mexico were postponed, Trump basically promised an additional month for the U.S. and its North American neighbors to work out a deal on fentanyl and immigration, which Trump claims are two of the reasons tariffs were necessary. That month will be up shortly, and when that happens, President Trump is now promising that tariffs on Canada and Mexico will, in fact, go into effect as early as next week.
Now, the shipping and logistics industry, as well as businesses at-large, are all watching closely to see if Trump’s threat will carry any weight this time. Will the U.S. really impose a costly penalty on two of its largest, most key trading partners? And at a time when the U.S. economy is beginning to show signs of slowing down? That is the multi-billion-dollar question right now.
Will China be hit by additional tariffs on top of existing ones?
Canada and Mexico are not the only two countries watching closely. When President Trump imposed tariffs on China earlier this year, it was a 10% tariff, largely across the board. Now, Trump is threatening another round of 10% tariffs in addition to the first 10%. These threats are all in the name of improving America’s trade balance with the world, which Trump believes to be severely unbalanced.
The world is watching as the economy starts to slow amid policy changes.
Additionally, yesterday, Trump stated that the European Union (E.U.) was formed in order to “screw the United States”. That statement sent shivers through manufacturers in some of the E.U.’s largest trading countries including Germany.
Global markets continue to flip-flop between genuine worry about tariffs and their effect on the global economy, and dismissal, where the tariffs are mostly seen as a threat and bargaining tool for improving U.S. trade relations. However, leading economic indicators are starting to look shaky, with jobless claims rising slightly this week and consumer confidence starting to drop significantly.
No one but President Trump knows what tariffs will actually go into effect long-term and which ones are purely for negotiation purposes. But the world is watching closely and hoping for more certainty in this period of uncertainty.
