Trump Raises Trade Tariffs | New Pressure on Global Markets and U.S. Inflation

US increases trade tariffs on Mexico, China and Canada

According to Investopedia, the U.S. government, under the directive of Donald Trump, has imposed new tariffs on imports from Mexico, Canada, and China. This decision, which was implemented after weeks of threats and speculation, could have a significant impact on financial markets, consumer costs, and inflation rates.

Details of Trump's New Tariffs

• 25% tariff on imports from Mexico
• 25% tariff on imports from Canada
• 10% tariff on imports from China (except for Canadian oil, which is subject to a 10% tariff)

These countries collectively account for 41.7% of total U.S. imports. This means that everyday goods imported from these nations will become significantly more expensive, and businesses are likely to pass these increased costs on to consumers.

The Impact of Tariffs on Inflation and Markets

Economists have warned that these tariffs could drive up inflation. According to an analysis by Deutsche Bank, the tariffs imposed on Mexico and Canada could raise the core PCE inflation rate by 1.4%. This increase may lead to higher prices for essential and everyday goods for American consumers.

A survey by Morning Consult also indicates that only 23% of Americans believe tariffs should be a priority for the Trump administration, while 79% of voters consider reducing the cost of living their main concern.

The Mexico Tariffs Temporarily Postponed!

Following the announcement of the new tariffs, Claudia Sheinbaum, the President of Mexico, stated that their implementation has been postponed for one month. However, the tariffs on Canada and China will still take effect starting Tuesday.

Is the European Union Trump's Next Target?

During his election campaign, Donald Trump repeatedly suggested that he might consider imposing tariffs on the European Union as well. Some analysts believe these tariffs could either be broad-based or applied to specific goods only. The Trump administration's recent decision to raise tariffs has been one of his most controversial economic policies to date.

These tariffs could increase the cost of living for consumers and put further pressure on inflation.

While the goal of this policy is to support U.S. domestic production, its impacts on the global economy, international trade, and investors remain uncertain. You can see some of the effects of this important decision on the chart of the US Dollar to Canadian Dollar currency pair on the the Trendo trading platform.