Will Donald Trump execute his threat of imposing customs duties on Canadian and Mexican products on February 1? The question is this Friday in all spirits, when the consequences could be severe for the three North American countries.
Barely returned to the White House, the Republican announced that he wanted to impose on February 1, 25 % customs duties on products from Canada and Mexico, two countries, which are theoretically protected by the free agreement exchange he had signed during his first mandate. “I’m going to put 25 % customs duties on Canada and separately, 25 % on Mexico. We really have to do it, because we have very large trade deficits with these countries,” said the American president on Thursday .
The latter also said that he would decide in the night whether or not to exempt from the oil produced in these two countries. The question is far from a detail: according to a report by the American Congress, Canada and Mexico count for 71 % of the United States crude oil imports, Canada representing 60 % alone. The United States is however a large producer.
“100 %” customs duties for the BRICS?
Chinese products could also be struck by customs duties of 10 %, also threatens Donald Trump, who also reiterated his threats on Thursday to impose customs rights 100 %”on the BRICS if this block of 10 countries (including Brazil, Russia, India, China and South Africa) takes place from the dollar in international trade.
“The idea that the members of the BRICS are trying to move away from the dollar, while we stay in the arms, is finished,” he published in a message on his Truth Social platform. “We will demand from these obviously hostile countries that they undertake not to create a new currency of the BRICS, nor to support another currency to replace the powerful US dollar, or they will be subject to customs duties 100 %”, he added, while the BRICS, who wish to reduce Western domination into a world which they design as” multipolar “, have initiated reflections to do without the dollar, reference currency for world exchanges. These countries have notably planned to create their own common currency.
Concern
The various threats of Donald Trump worry analysts, while the American economy is like a charm, with growth of 2.8 % in 2024: according to Oxford Economics, if these rights were applied, the American economy would lose 1, 2 growth percentage point, and could plunge Mexico into the recession.
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For Wendong Zhang, professor at Cornell University, if the shock will not be so strong for the United States, it will undoubtedly be for Canada and Mexico. “In such a scenario, Canada and Mexico can expect to see their GDP falls 3.6 %and 2 %, the United States by 0.3 %,” he said. Beijing too “would suffer from an escalation of the existing trade war, but would benefit at the same time (tensions between the United States), Mexico and Canada”.
The Mexican president, Claudia Sheinbaum, was rather optimistic on Wednesday, sweeping the idea of an increase in taxes: “We do not think that will happen. But if this is the case, we have a plan.” The concern exists despite everything, especially for the agricultural sector, which largely exports to the United States. “Almost 80 % of our exports go to this country and in any event, everything that could cause a shock concerns us,” said JUAN CORTINA on Tuesday at the head of the National Council of the agriculture.
A weapon to obtain concessions
During the campaign, the Republican candidate said he wanted to impose customs duties from 10 % to 20 % on all products imported into the United States, and even 60 % to 100 % on products from China. The objective was then to financially compensate for the tax cuts he wishes to apply during his mandate.
Since its election, the tone has evolved. Rather than a tool to fill the drop in tax revenue, customs duties have become, as during its first mandate, a brandy weapon in order to impose negotiations and obtain concessions. Donald Trump explained that customs duties were an answer to the inability of his neighbors to brake the entrance to drugs, in particular fentanyl (an opioid) and migrants in the United States. His candidate for the post of secretary to trade, Howard Lutnick, spoke of an “interior policy” which aims “simply to push them to close their borders”, during his confirmation hearing at the Congress on Tuesday. “I know that they act quickly,” he said, about the two countries. “If they do what it takes, there will be no customs duties”.
A situation that is reminiscent of the tensions between Washington and Bogota last weekend, when Colombia initially refused the landing of flights carrying expelled migrants. Donald Trump had then announced sanctions, including customs duties of 25 % and then 50 %, to which his Colombian counterpart, Gustavo Petro, had replied, before the two agreed on the terms of return of the people concerned and abandon their threats.