New U.S. tariffs raise market's concerns
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On Monday, February 25th, U.S. President Donald Trump confirmed the imposition of new tariffs on products from Canada and Mexico, which will raise import duties to 25%. The newly elected U.S. President had already signed executive orders on February 1st, imposing 25% tariffs on products imported from Canada and Mexico, along with an additional 10% tax on the Canadian energy sector. However, despite initially postponing the arrival of new tariffs at the beginning of February after reaching some agreements with Canada and Mexico, this week Trump announced that the new tariffs on products from both countries would still take effect at the beginning of March.
New tariffs: market's reactions
Financial markets reacted with concern, especially because the new trade policies are expected to lead to a probable rise in inflation in the United States, lowering the chances that the Federal Reserve – the U.S. central bank – will be able to implement an easing policy. Such a measure is used by central banks, when necessary, to purchase financial securities – such as bonds – in order to increase commercial bank reserves. Quantitative easing, furthermore, through direct purchases, helps reduce long-term interest rates, promoting economic activity.
Canada, Mexico, China and reciprocal tariffs
This new trade policy is seen by Trump as an effective tool both for negotiating with other states and as a source of additional revenue for the state’s coffers. In line with what was proposed during his presidential campaign, one of the first actions taken by the Trump administration was the imposition of a 10% tariff on imports from China, to which Beijing responded by introducing new tariffs on U.S. products. Meanwhile, Canadian leader Justin Trudeau and Mexican President Claudia Sheinbaum confirmed their intention to apply retaliatory tariffs on products imported from the United States. Canada has already announced tariffs on American products like whiskey, and Mexico is working on appropriate retaliatory measures. In the meantime, China has initiated legal action – against the United States – through the World Trade Organization (WTO).
The DOC (Department of Commerce) considers additional duties on copper imports
However, the U.S. tycoon’s attention is also focused on the copper sector – a metal that the United States imports 45% of from Canada, Mexico, and Chile. In this regard, the Department of Commerce has been tasked with analyzing the potential benefits of imposing new tariffs on copper imports, which is used in various sectors, from electronics to defense to consumer goods.
The new tariff policy divides U.S. public opinion
The new customs policy of the Trump administration has divided U.S. public opinion: according to a poll published by the British consulting firm Public First, 35% of respondents supports the imposition of new tariffs, while 33% disagree. Moreover, 41% think that the new trade policy could lead to a whiplash effect and harm the economy, unlike 33% of respondents who support the opposite and express confidence in Donald Trump’s actions. In general, the results published by Public First suggest that the positive or negative judgments regarding the new trade policies implemented by the Trump administration depend not only on economic reasons but also on what U.S. citizens think about the countries involved in the tariff increase on imports.
New tariffs: market's reactions
Financial markets reacted with concern, especially because the new trade policies are expected to lead to a probable rise in inflation in the United States, lowering the chances that the Federal Reserve – the U.S. central bank – will be able to implement an easing policy. Such a measure is used by central banks, when necessary, to purchase financial securities – such as bonds – in order to increase commercial bank reserves. Quantitative easing, furthermore, through direct purchases, helps reduce long-term interest rates, promoting economic activity.
Canada, Mexico, China and reciprocal tariffs
This new trade policy is seen by Trump as an effective tool both for negotiating with other states and as a source of additional revenue for the state’s coffers. In line with what was proposed during his presidential campaign, one of the first actions taken by the Trump administration was the imposition of a 10% tariff on imports from China, to which Beijing responded by introducing new tariffs on U.S. products. Meanwhile, Canadian leader Justin Trudeau and Mexican President Claudia Sheinbaum confirmed their intention to apply retaliatory tariffs on products imported from the United States. Canada has already announced tariffs on American products like whiskey, and Mexico is working on appropriate retaliatory measures. In the meantime, China has initiated legal action – against the United States – through the World Trade Organization (WTO).
The DOC (Department of Commerce) considers additional duties on copper imports
However, the U.S. tycoon’s attention is also focused on the copper sector – a metal that the United States imports 45% of from Canada, Mexico, and Chile. In this regard, the Department of Commerce has been tasked with analyzing the potential benefits of imposing new tariffs on copper imports, which is used in various sectors, from electronics to defense to consumer goods.
The new tariff policy divides U.S. public opinion
The new customs policy of the Trump administration has divided U.S. public opinion: according to a poll published by the British consulting firm Public First, 35% of respondents supports the imposition of new tariffs, while 33% disagree. Moreover, 41% think that the new trade policy could lead to a whiplash effect and harm the economy, unlike 33% of respondents who support the opposite and express confidence in Donald Trump’s actions. In general, the results published by Public First suggest that the positive or negative judgments regarding the new trade policies implemented by the Trump administration depend not only on economic reasons but also on what U.S. citizens think about the countries involved in the tariff increase on imports.