President Trump is keeping his powder dry, at least for now, in imposing tariffs to further his administration's effort to redefine trade relationships with other major economies around the world.
Mr Trump, who as president-elect has said he may move to apply comprehensive fee On his first day in office he stopped short of imposing so-called universal tariffs on foreign imports or directly targeting China, on which he had threatened to impose 60% tariffs.
Instead, Mr Trump said on Monday his administration was considering imposing 25% tariffs on Canada and Mexico from February 1 unless they take stronger steps to stem the flow of unauthorized immigrants and illegal drugs coming into the US. Don't pick up.
“We're thinking in terms of 25% on Mexico and Canada, because they're allowing large numbers of people – Canada is a very bad abuser too – allowing large numbers of people to come in and get fentanyl. ,” Mr Trump said on Monday as he signed Limitation of Executive Orders Addressed the US economy, immigration, energy policy and other areas on his first day in office.
When Mr Trump was asked about his plans to impose sweeping tariffs on US imports, he said it remained a possibility, but “we're not ready for it yet.” As a candidate during the 2024 presidential campaign, he proposed across-the-board tariffs of 10% to 20% on all US imports.
In his inauguration speech on Monday, Mr. Trump said that “instead of taxing our own citizens to enrich other countries, we will impose tariffs and taxes on foreign countries to enrich our own citizens,” though he did not provide any specific details. Didn't give.
one in memorandum On Monday, Mr Trump also called for a review of existing US trade agreements and sought recommendations on how the US can gain leverage with trading partners.
In the memorandum Mr Trump said: “I am establishing a strong and revitalized trade policy that promotes investment and productivity, enhances our nation's industrial and technological advantages, protects our economic and national security, and “Benefits American workers, manufacturers, ranchers, entrepreneurs, and businesses.”
winding road to business
Initially, analysts now expect the Trump administration to gradually impose tariffs. Economists warn that tariffs will increase significantly Inflation may get a boost and slow economic growth. Mr Trump has long argued that tariffs imposed during his first term did not spur inflation and increased the cost of foreign imports. Could help protect American jobs,
“In short, given the potential for targets to move around in scope and scale, the path to tariff implementation may be less straightforward than a universal tariff baseline,” Morgan Stanley analysts said in a report on Monday.
But other experts said they still expect the Trump administration to eventually adopt a universal tariff, noting that the new administration is investigating what it calls the External Revenue Service to collect tariff revenue. Should it be made or not? This suggests “the administration intends to keep some tariffs permanent,” Stephen Brown, deputy chief economist for North America at Capital Economics, told investors in a research note.
risk of retaliation
Meanwhile, experts say any US action to impose new tariffs on other countries will lead to retaliation. Canadian Prime Minister Justin Trudeau promised a sharp response to any new tariffs, saying at a news conference in Ottawa on Tuesday that “everything” is on the table, according to AFP.
In November, a Canadian government official said it was exploring possible retaliatory charges on some US imports after Mr Trump, then president-elect, threatened to impose 25% tariffs on all goods from Canada and Mexico.
According to economist Michael Davenport of Oxford Economics, a 25% US tariff on Canadian imports is likely to increase inflation in Canada and push it into recession in 2025. He said the country's auto, energy and heavy manufacturing industries, which depend on exports to the US, would feel the most impact as these sectors are also dependent on components from US suppliers.
According to experts, the trade war with Canada will also affect America. According to Oxford, universal tariffs on US products would likely cause a “shallow” recession in the US.
Canada also supplies about 20% of the oil to the states. As a result, U.S. gas prices could rise 30 to 40 cents a gallon, and potentially as much as 70 cents, soon after Trump imposes tariffs on Canada, Patrick de Haan, head of petroleum analysis at GasBuddy, tells CBS MoneyWatch.
Stephanie Brinley, associate director of autointelligence at S&P Mobility, expects the Trump administration to eventually impose a 10% tariff on all imports from Europe, Japan and other countries other than Canada, China or Mexico. The research firm also anticipates a 30% tariff on goods coming from mainland China.
“We see these tariffs starting in the second quarter and increasing over the next four quarters,” he said in a report Tuesday. It said countries facing new US tariffs were likely to retaliate with trade sanctions of their own.
Contributed to this report.