Former President Donald Trump announced on his Truth Social platform that a 25% tariff on goods imported from Mexico would be implemented. This announcement, alongside a proposed additional 10% tariff on Chinese goods, caused major stock indexes to fall after initial gains. Trump cited the need to combat illicit drug flow into the United States as the reason for the tariffs on Mexican imports. He stated that these tariffs would remain in effect until the drug flow stopped or was significantly reduced.
Trump also mentioned reciprocal tariffs on major trading partners, initially threatened earlier in the month, scheduled for April 2nd. He had previously proposed similar tariffs on Canada and Mexico, but suspended them for 30 days after claiming concessions from both countries. These concessions, including troop deployment by Mexico and a new anti-drug policy for Canada, were viewed by some experts as less significant than initially presented.
While a proposal for steel and aluminum tariffs was also scheduled to take effect, Trump did not address this in his social media post. Recent calls for tariffs on autos, computer chips, and pharmaceuticals were also omitted. The White House indicated that the reciprocal tariffs planned for April would depend on studies assessing their potential impact.
Despite numerous tariff threats since taking office, only an additional 10% duty on Chinese goods, on top of existing levies, has been implemented. However, analysts suggest that the uncertainty surrounding Trump’s tariff proposals has negatively impacted both the market and the economy.
Capital Economics, a research and consultancy group, observed that Trump’s presidency amplified economic uncertainty, with threats of punitive tariffs and potential disruption of geopolitical alliances creating global unease. This uncertainty could potentially hinder global investment and consumer spending, especially if tariff deadlines are repeatedly postponed.
Trump previously asserted that the tariffs would generate revenue and reduce America’s budget deficit, claiming that they would make the country “extremely liquid and rich again.”
