Dilara Zengin
23 January 2025•Update: 23 January 2025
WASHINGTON
US President Donald Trump’s tariff threats targeting Canada, China, and Mexico have heightened global trade tensions, despite his failure to announce concrete plans thus far.
Trump, who took office on Monday, pledged during his campaign to impose tariffs on his first day, but no immediate action has been taken. This delay has provided temporary relief to investors, contributing to an optimistic mood in the markets.
In November, Trump vowed to impose a 25% tariff on all products from Mexico and Canada. However, after assuming office, he said he is still considering the move, with a decision potentially coming on Feb. 1. These threats are tied to economic disputes, as well as disagreements over alleged illegal immigration and drug trafficking.
On Tuesday, Trump accused Mexico and Canada of allowing large numbers of people to cross the border into the US, claiming they bring fentanyl, a powerful opioid, into the country.
During his inauguration, Trump promised sweeping changes across various sectors. He said he would review the US trade system and implement tariffs on foreign countries to “enrich” American citizens. On his first day in office, he signed a series of executive orders covering topics such as energy and immigration and issued a memorandum directing federal agencies to conduct a comprehensive review of trade policies under the “America First Trade Policy.”
The memorandum instructs agencies to examine unfair trade practices and foreign exchange policies, with a deadline of April 1.
Threats against Europe and Russia
On Monday, Trump wrote on Truth Social that the EU must address its “tremendous deficit” with the US by making large-scale purchases of American oil and gas, warning that “otherwise, it is TARIFFS all the way!!!”
On Wednesday, Trump directed a post at Russian President Vladimir Putin, urging him to end the war in Ukraine. “Settle now, and STOP this ridiculous War! IT’S ONLY GOING TO GET WORSE,” he wrote.
Trump also threatened Russia with “high levels of taxes, tariffs, and sanctions on anything sold by Russia to the United States, and various participating countries.” He added, “Let’s get this war, which never would have started if I were President, over with.”
Economic Damage Looms
Despite Trump’s ongoing threats, it remains unclear whether these are negotiation tactics or actual plans.
“These tariffs would damage all the economies involved, including the US,” according to a Jan. 17 analysis by the Peterson Institute for International Economics (PIIE). The report warned that imposing tariffs would slow economic growth and accelerate inflation in the US, Canada, and Mexico.
The PIIE analysis also noted the risk of retaliatory measures from Canada and Mexico, which could disrupt integrated production lines and supply chains in North America. However, it added that “history suggests that Trump may not act on his threats.”
The analysis speculated that the US-Mexico-Canada Agreement (USMCA), scheduled for review in 2026, could be expedited to 2025. If concessions are made during the review process, the tariffs could potentially be avoided.
*Writing by Emir Yildirim in Istanbul
