Trump has launched trade wars and imposed sanctions on allies and neighbors, but for some reason they have not affected Russia

President Trump, as promised, imposed a 25% duty on imports of goods from Canada and Mexico on February 1 and increased the duty on goods from China from 25% to 35%. At the same time, in order to reduce the jump in gasoline prices in the United States, which receives 17% of its oil and oil products imports from Canada, the duty on these products will be only 10%. Trump explains this step by the fight against illegal migration and drug smuggling from these countries.

Mexico, Canada, and China are the main trading partners of the United States. Last year, the United States imported $466.6 billion worth of goods from Mexico, $377.3 billion from Canada, and $401.4 billion from China.

Canada, which imports $106 billion worth of goods from the United States, responded by imposing a 25% duty on American goods, and Prime Minister Trudeau urged his fellow citizens to buy local goods and vacation in Canada rather than the United States.

Mexican President Sheinbaum said that problems should be solved through negotiations, not tariffs, but instructed the government to take retaliatory measures, which would include a 25% duty on US goods.

By imposing the tariffs, Trump violated the ISA free trade agreement with three neighboring North American countries, signed during his first term. Although Canada is not only a neighboring country friendly to the United States, but also a close NATO ally.

China said that the tariff increase violates the rules of the World Trade Organization and promised to file a lawsuit against the United States in the WTO for “unfair practices” and to take measures to protect its interests, emphasizing that “there are no winners in tariff wars.”

Trump is convinced that Canada, Mexico, and China will pay for the new tariffs, but in fact, American consumers will pay for them. In 2-3 months, inflation will rise sharply in the United States, as essential goods will rise by 25%, as 70% of fruits and vegetables are imported from Mexico, cheap clothes, shoes, household goods, computers and other electronics from China, and cars and spare parts from Canada. The giants General Motors and Ford Motor produce 88% of the pickup trucks sold in the United States at their plants in Mexico. Almost 60% of the oil imported by the US comes from Canada, and most refineries in the northern US operate on it.

A jump in inflation will have a negative impact on the economy and could lead to a recession. To curb inflation, the Fed will be forced to raise the discount rate, which will make loans more expensive and slow down business development.

Prices for agricultural products in Chicago fell on Friday as the market did not believe in the introduction of tariffs. Therefore, this week the quotes will react to the new tariffs in the US and the measures taken by other countries. However, any changes in trade chains will lead to supply disruptions, slowdowns in the economies of all countries involved in the dispute, and falling prices.

In addition, Trump promises to impose duties on another ally, the EU, but there are no hints of a possible restriction on the supply of goods from Russia, one of the main opponents of the United States.

Tags: China, EU, Canada, USA, restrictions, Mexico, Russia