 "US President Donald Trump. (Photo: Reuters)")
US President Donald Trump has said plunged the world in confusion regarding impending tariffs.
While Trump had previously said that tariffs on Mexico and Canada would go into effect in March , he has now pushed the timeline by a month. He has also threatened to impost up to 25 per cent reciprocal tariffs on the European Union (EU).
Shortly after assuming office, Trump signed executive orders to impose 25 per cent tariffs on Mexico and Canada for their failure to check the flow of illegal immigrants and fentanyl into the United States from their soil. He also imposed 10 per cent tariffs on China as fentanyl is often sourced from there. Last month, Canada and Mexico secured one month reprieve as negotiations to avert a trade war continued.
After Trump on Monday said that tariffs are “going forward on time, on schedule”, he said on Wednesday that tariffs are now going to go into effect on April 2.
“I have to tell you that, you know, on April 2, I was going to do it on April 1, but I’m a little bit superstitious, I made it April 2, the tariffs go on. Not all of them but a lot of them,” said Trump.
Reprieve for Canada & Mexico, anxiety for EU
After Trump delayed tariffs by another month, Mexican peso and Canadian dollar rose in value. However, euro and European stocks fell after Trump said that tariffs are soon going to be implemented on EU.
Trump said that tariffs to the tune of 25 per cent are in the offing for EU.
Trump said, “We have made a decision, and we’ll be announcing it very soon, and it’ll be 25 per cent, generally speaking, and that’ll be on cars, and all of the things…They don’t accept our cars. They don’t accept, essentially our farm products.”
Impact Shorts
More ShortsTrump further said that the EU was formed “in order to screw the United States”.
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After Trump’s remarks, Commerce Secretary Howard Lutnick said that even though talks with Canada and Mexico are going on, tariffs are set to go in effect on April 2.
“So the big transaction is April 2, but the fentanyl-related things, we’re working hard on the border. At the end of that 30 days, they have to prove to the president that they’ve satisfied him in that regard. If they have, he’ll give them a pause, or he won’t,” said Lutnick.
The threat to impose tariffs EU comes weeks after Trump signed an executive order to prepare reciprocal tariffs on all countries . In simple terms, reciprocal tariffs mean that the United States will impose same tariffs on a country that that country imposes on US goods.
Trump’s uncertainty may affect US credibility
Analysts have said that the uncertainty that Trump has brought with his frequent changes in the timeline and confusing statements is affecting US credibility.
Marco Oviedo, a Sao Paulo-based strategist at XP Inc, told Bloomberg, “Trump is losing credibility. The market will probably start trading less the tariff story.”
Win Thin, the global head of markets strategy at Brown Brothers Harriman, told Bloomberg, “By drawing out the uncertainty, firms are left with an uncertain outlook that will likely delay investment and hiring. A rolling one-month threat will just perpetuate this uncertainty.”