Trump Throws Cold Water On Hopes Of Last-Minute Canada, Mexico Tariff Reprieve | Global News Avenue

On Monday, President Donald Trump said that the last-minute probation on tariffs on Canada and Mexico was dim as the plan began.

Earlier Monday, business leaders, leading market players and economists were still speculating whether tariffs on Canada and Mexico would take effect or whether Trump would bring them back at the last minute like he did the previous month. Last week, he said tariffs are underway because the countries have not done enough to stop drug smuggling into the United States, and the United States is moving forward Shoot Additional tariffs on Chinese products.

“Tomorrow, tariffs, 25% in Canada, and 25% in Mexico,” Trump said in a comment on the White House televised remarks. “So, they will have to impose tariffs. So, all they have to do is build their own car plants and other things in the United States.”

Earlier in the day, some analysts expected tariffs to be delayed or downplayed, while others were ready for the impact. Tariffs on Mexico and Canada should come into effect in February, but Trump has delayed it by a month after both countries said they would strengthen border security.

Although Trump and his top advisers have spent several weeks recently Talk about economic interests Tariffs – manufacturing in the U.S. and providing revenue to the government – ​​have reason to believe that Trump can back down at least some of his latest tariff threats.

Michael Pearce, chief U.S. economist at Oxford Economics, speculated that Mexico’s handover of drug cartel agents to the United States last week would allow Trump to win and delay tariffs on Mexico, and Canada would also receive a suspended sentence. However, he believes that all announced tariffs will be avoided.

“Even if Canada and Mexico get the week’s pass, Trump will likely continue to have another 10% tariff on China to show he is still walking in terms of tough trade talks,” he wrote in a comment.

Commerce Secretary Howard Lutnick said earlier on Monday that Trump will decide whether to impose tariffs on Mexico and Canada and at what level. “They did a great job at the border, but they didn’t do enough with fentanyl and he had to decide how he wanted to play,” Lutnik told him. CNN.

Economists say tariffs will stimulate inflation

Some economists struggle with uncertainty in assumptions that some, but not all, tariffs will come into effect. Pantheon macroeconomics predicts consumer prices will rise by 0.5 percentage points due to tariffs.

“We hope Mr. Trump will soon follow the additional tariffs on major trading partners,” Samuel Tombs, chief economist at Pantheon macroeconomics, wrote in a comment. “It is impossible to judge which tariffs will be imposed and how long, but we think our assumption of a 0.5pp rise can balance the risk.”

Economists at the Atlanta Federal Reserve Bank said last week that the price of what consumers typically buy will rise by about a quarter, increasing the cost of living from 0.8% to 1.6%, depending on how much the tariff merchant costs.