The currencies of Canada, Mexico and China have fallen due to the statement of the newly elected US President Donald Trump. Mexico's peso weakened 1.18% against the dollar on the day, according to the New York Times. At the same time, the Canadian currency weakened by 1% against the Canadian dollar and the US dollar. This is the biggest drop in the Canadian currency since May 2020.
At the same time, China's currency, the yuan, has also depreciated. However, this is less compared to Mexico. The Chinese currency yuan weakened 0.3% against the dollar.
In fact, Trump has announced that he will impose heavy tariffs on goods coming into the US from Canada, Mexico and China as soon as he takes the oath of office. Trump has said that unless these three countries control drugs and illegal immigrants, they will have to bear the brunt of heavy tariffs imposed by the US.
The highest tariffs will be imposed on China Trump said in a social media post on Monday that he would impose 25% tariffs on Canada and Mexico. He said that if both Canada and Mexico wanted to, they could easily control illegal immigrants and drug (fentanyl) supply, but they are not doing so. Due to which they have to pay a heavy price.
At the same time, Trump has announced a 35% tariff on China. This is 10% more than installed in Mexico and Canada. Trump said-
China illegally smuggles large quantities of drugs into the US. I had raised this issue before China. The Chinese authorities then promised that they would apply the death penalty if the drug dealers were caught, but they did not.
Trump's tariff war will increase inflation It is worth mentioning that America has free trade agreements with Canada, Mexico and China. Under this there is no tariff on any kind of import-export between these countries. During his last term, Trump signed the North American Free Trade Agreement (NAFTA) with Mexico and Canada.
If Trump imposes tariffs on these countries after coming to power, it will be a violation of the agreement.
These three countries bought goods worth more than 1 trillion dollars (about 85 lakh crore rupees) from America in 2023. Over 1.5 trillion dollars were sold at the same time. According to the report, Trump's tariff war will have the biggest impact on the auto sector, agriculture, technology and parts. After the imposition of tariffs, the price of these items will increase.
China said – no one will win in a trade war Liu Pengyu, the spokesperson of the Chinese Embassy in Washington, said that there was a conversation between US President Joe Biden and Chinese President Xi Jinping last year. In which measures were taken against drug smuggling, but it is not right to say that China is knowingly supplying drugs like fentanyl to America.
Liu said that Sino-US trade is beneficial for both countries. It should not be tampered with. No one wins a trade war.
Canada said – will discuss this issue with Trump
Canadian Prime Minister Justin Trudeau's office has issued a statement saying that Canada is essential for energy supply to America. Last year the US 60% of the oil used by came from Canada. He will discuss these issues with Trump's team.
Mexican officials have not yet responded to Trump's post. However, Trump has already threatened to impose tariffs against Mexico. In the final days of the election campaign, he threatened to impose tariffs of up to 100% on all goods coming from Mexico. Mexican officials later said they were also prepared to impose tariffs.
According to the report, Mexico could suffer the most from Trump's tariff war. This country is very dependent on America. It sells 80% of its goods to America.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
