Here’s a breakdown of the provided text, focusing on the key information about trade relations and tariffs:
Mexico:
Negotiations Extended: Mexico has extended negotiations with the US for another 90 days regarding business relationships, aiming for a new trade agreement.
Current Tariffs Remain: The existing 25% duty on imported Mexican goods to the US will continue to apply during this negotiation period.
Canada:
Tariff Increase: The US has increased tariffs on a significant portion of goods imported from Canada.
The new tariff rate is 35%, up from the previous 25%. This increase takes effect on Friday.
justification for Increase: the White House stated that President Trump increased the tariffs on Canada due to their “continuing inactivity and retaliation” and to “effectively address the existing unusual situation.”
Fentanyl Opioid as a reason: Trump specifically justifies thes tariffs by claiming Canada is not preventing the flow of fentanyl opioid across the northern border.
Counterpoint on Fentanyl: The text points out that official government statistics show only about 0.2% of seized fentanyl in FY2024 was confiscated at the Canada border, despite significant US investments in border security.
Canadian response:
Canadian Prime Minister Mark Carney expressed disappointment with Trump’s decision.
He emphasized that Canada continues to fulfill its obligations under the USMCA (United States-Mexico-canada Agreement).
Carney highlighted that the USMCA agreement ensures that the average US customs rate on canadian goods remains low compared to other business partners.
He also stated that Canada is strong in sectors like wood, steel, aluminum, and the automotive industry.
market Reaction:
An economist from Westpac in Sydney noted that markets are likely in a “waiting” mode, unsure if the current rates are final or still subject to negotiation.
