TRUMP'S MACHO TARIFF DIPLOMACY COULD TURN INTO TRADE WARS

Trump's tariff strategy may trigger global trade wars, harming US reputation and causing widespread economic damage

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Tariff", Donald Trump repeatedly said throughout his 2024 campaign, "is the most beautiful word in the dictionary.

I love tariffs. I think they're gonna make us rich." True to his word, within hours of returning to the Oval Office Trump signed into effect tariffs of 25 percent on all imports from Canada and Mexico, as well as an extra 10 percent on products from China. The immediate reaction was predictable. Canada threatened to apply 25 percent tariffs on $155 billion of American goods, from orange juice to appliances to car parts and threatened non-tariff measures relating to energy and procurement. Mexico's President Claudia Sheinbaum immediately ordered retaliatory tariffs on imports from the US, claiming that Trump's tariffs were a "flagrant violation of the USMexico-Canada Agreement.

The US is by far Mexico's most important foreign market. In 2023 Mexico overtook China as top destination for US exports, accounting for more than $322 billion, while the US imported more than $475 billion worth of Mexican products. Almost a third of Mexico's GDP depends directly on exports to the US.

Canada's trade with the US, which crosses all industries, is said to be the largest in the world and is vital to both countries. In 2023, goods and services trade between the two countries amounted to $923 billion. US exports were $441 billion, while imports were $482 billion, resulting in a trade deficit of $41 billion in favour of Canada. Tariffs of 25 percent, if ever applied, will therefore have a dramatic effect on trade between the US and its neighbours.