After Trump’s initial threat of 25% tariffs in November, Mexican President Claudia Sheinbaum suggested Mexico could retaliate with tariffs of its own. Since then, she has been more measured, choosing to emphasize the strong bilateral relationship and willingness to engage in dialogue as the number of detentions at the U.S.-Mexico border has plunged.
Sheinbaum pointed out in November that drugs were a U.S. problem, but in December the Mexican military seized more than a ton of fentanyl pills in two raids, calling it the biggest catch of synthetic opioids in Mexico’s history.
On Monday, Sheinbaum applauded the agreement reached by the Trump administration and Colombia.
“I believe the important thing, as I said on the first day, is to always act with a cool head, defending each country’s sovereignty and the respect among nations and peoples,” she said.
Top Canadian ministers said last week that Canada was prepared to retaliate if Trump imposed import taxes, even as Canadian Foreign Minister Mélanie Joly said they “will continue to work on preventing tariffs.” The working theory in Canada appears to involve being ready for anything that the U.S. president might do.
Tariffs could slow the economy and hurt the oil and auto sectors
On Monday, the economics division of the insurance company Nationwide estimated that Trump’s proposed tariffs on Canada and Mexico would increase inflation by as much as 0.5 percentage points and pull down growth by 0.7 percentage points.
The analysis noted it did not “account for potential retaliatory tariffs from Canada or Mexico, which could amplify the deleterious impact on inflation and GDP growth.”
Trump has made lower gasoline prices one of his key strategies for tackling inflation, but tariffs on Canada could drive up prices at the pump unless Trump creates carveouts in his plan.
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Source: AP
