Trump's tariff threat looms over Canada, Mexico 25% Levy Expected by February 1

The Trump administration is increasingly leaning towards imposing 25% tariffs on Mexico and Canada, with discussions suggesting that the decision could come as soon as February 1. 

This shift marks a departure from conventional expectations that the US president might back off from these levies, as he has in the past, following diplomatic concessions, Caliber.Az reports, citing American newspaper.

Trump's approach to trade has been notably aggressive in recent weeks, signalling his intention to use tariffs as a primary negotiating tool.

Despite pulling back on a similar tariff threat towards Colombia on January 26, citing the country’s refusal to accept repatriation flights, senior administration officials indicated that Trump's commitment to tariffs as a form of "effective punishment" remains intact. 

He is reportedly "very serious" about moving forward with tariffs on Canada and Mexico, expecting their cooperation on issues ranging from border security to trade reforms.

The prospect of tariffs has raised alarms among investors and businesses, particularly in Canada and Mexico. Goldman Sachs recently put the likelihood of tariffs at just 20%, given the president's history of threats that often go unfulfilled. However, Trump's administration appears more inclined to implement tariffs upfront, moving quickly to impose penalties before engaging in talks.

In Mexico, progress has been made to meet Trump’s demands, including cooperation on migrant repatriation flights and increased border security efforts. However, the administration believes these actions still fall short of expectations. Canada, meanwhile, is preparing retaliation measures should tariffs be enacted. The country’s dependence on trade with the US, which accounts for about 20% of its GDP, makes such moves particularly concerning.

Trump’s tariff-first strategy is driving tensions across the continent, with officials in both Canada and Mexico expressing frustration over their inability to negotiate with an administration still awaiting full confirmation of key trade officials.

The tariffs would impact various industries, particularly the automotive sector, which relies heavily on cross-border supply chains. The uncertainty over how tariffs would be applied to goods crossing multiple borders is creating concern among multinational corporations.

By Aghakazim Guliyev