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Trump's trade strategy: 25% Tariffs on imports from Canada, Mexico imminent

World News: President Donald Trump announced a 25% tariff on imports from Canada and Mexico, part of his "America First trade policy," aimed at addressing trade deficits and curbing immigration issues.

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25% Duties on Canada and Mexico (X/@MelissaLMRogers ·)

World News: On January 21, 2025, President Donald Trump announced a significant shift in U.S. trade policy, imposing 25% tariffs on imports from Canada and Mexico starting February 1. This move is part of his “America First trade policy,” aiming to address trade deficits and bolster American manufacturing.

Tariff Announcement and Trade Deficits

During a press conference at the Oval Office, Trump revealed that the U.S. currently faces a trade deficit of over 150 billion dollars with Mexico and 67 billion dollars with Canada. He stated that the tariffs are not only economic measures but also aimed at curbing immigration and drug trafficking, particularly fentanyl. "We are thinking in terms of 25% on Mexico and Canada because they are allowing vast numbers of people... to come in," Trump said.

Executive Order for Comprehensive Review

In conjunction with the tariff announcement, Trump signed an executive order directing federal agencies to evaluate existing trade relationships and recommend measures to address persistent trade deficits. The order mandates a thorough review of trade agreements, including those with China, to identify unfair practices and potential tariff adjustments.

Economic Implications of Tariffs

The sectors most likely to be affected by the new tariffs include machinery, electronics, transport equipment, and food products, as highlighted by a Peterson Institute analysis. Economists warn that such tariffs could disrupt supply chains and lead to increased prices for consumers across various sectors. Trump's executive order also emphasizes a review of the U.S.-China trade agreement, particularly concerning technology transfer and intellectual property rights. The U.S. Trade Representative has been tasked with assessing whether China is adhering to its commitments under this agreement.

Future Trade Dialogues

As the U.S. looks to reset its trade policies, there are indications that countries like India may be open to discussions on trade agreements. Trump's administration aims to explore bilateral agreements that could enhance market access for American exports.

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