The Global Economy Awaits: Trump's Tariff Deadline Looms This title effectively conveys the sense of anticipation and uncertainty surrounding President Trump's deadline to impose tariffs on Canada, Mexico, and China. The use of "Looms" adds a sense of urgency and foreboding, hinting at the potential consequences of these tariffs for global trade and economic stability.

The Global Economy Awaits: Trump's Tariff Deadline Looms

As the world holds its breath, President Donald Trump's deadline to impose sweeping tariffs on Canada, Mexico, and China draws near. In this blog post, we'll delve into the implications of these tariffs, exploring the potential consequences for global trade and economic stability.

A Brief History of Tariffs Under President Trump

Before examining the specifics, let's take a step back and examine the history of tariffs under President Trump's tenure. During his first term, Trump made waves by announcing or threatening policy changes on short notice. This unpredictability has left many wondering what will happen next.

The Stakes are Higher Than Ever

With less than 24 hours to go before the deadline, the global economy is bracing for impact. Tariffs are paid by US businesses to the government on purchases from abroad, and the economic weight can fall on importers, foreign suppliers, or consumers. The potential consequences are far-reaching, with experts predicting a significant shock to the system.

The Numbers Game: A Warning of Economic Turbulence

According to JPMorgan analysts, the promise of tariffs is "a bargaining chip" to accelerate the renegotiation of a trade deal between the United States, Mexico, and Canada. However, potentially dismantling a decades-long free-trade area could have devastating effects on the economy.

Canada and Mexico would suffer the most under 25% US tariffs, with proportional retaliations from both countries.
The United States would lose 0.3% real GDP, while Canada and Mexico would experience losses of 3.6% and 2%, respectively (Wendong Zhang, Cornell University).

The Risk of Recession: A Grim Reality

Experts warn that blanket US tariffs and Ottawa's response in kind could cause Canada to fall into a recession this year. The United States also risks a shallow downturn.

Blanket US tariffs and proportional retaliations from Canada could cause Canada to fall into a recession this year (Tony Stillo, Oxford Economics).
Mexico could face a similar situation (Tim Hunter, Oxford Economics).

The Role of Crude Oil: A Wild Card

It remains unclear whether crude oil imports will be included in the tariffs on Canada and Mexico. This is significant, as Canada and Mexico supplied more than 70% of US crude oil imports.

Canadian officials have pledged to provide pandemic-level financial support to workers and businesses if US tariffs hit.
Prime Minister Justin Trudeau has emphasized that Ottawa is working to prevent the levies and stands ready to issue a strong response (Justin Trudeau, Prime Minister of Canada).
Mexican President Claudia Sheinbaum has expressed confidence in her country's ability to avoid the levy.

A "Grand Bargain" in the Making?

Trump still eyes fresh tariffs on Chinese goods, saying he is mulling them. White House spokeswoman Karoline Leavitt told reporters this week: "The president has said that he is very much still considering that for February 1st."

Beijing has vowed to defend its "national interests," and a foreign ministry spokeswoman previously warned that "there are no winners in a trade war."
Isaac Boltansky of financial services firm BTIG expects to see "incremental tariff increases" on Chinese goods, with consumer goods likely to face lower hikes.

Conclusion: A World of Uncertainty

As the world waits for Trump's deadline to impose tariffs on Canada, Mexico, and China, one thing is certain: the global economy will be significantly impacted. With so much at stake, it's essential to stay informed about the potential consequences of these tariffs.

In this context, "presage" refers to a warning or indication of what is to come. In this case, the presage is the uncertainty and unpredictability surrounding Trump's tariff deadline.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.