With less than 24 hours to go before Donald Trump’s deadline to impose sweeping tariffs on Canada, Mexico, and China, the global economy is on high alert. The United State President has made it clear that he intends to introduce major trade levies unless key demands are met.
Trump has warned that Canada and Mexico will face 25% tariffs on their exports to the U.S. unless they take stronger action to curb illegal migration across the southern border and restrict the flow of fentanyl—an extremely potent opioid that has caused tens of thousands of overdose deaths annually.
Meanwhile, Chinese imports could see an additional 10% tariff as soon as Saturday, also tied to fentanyl concerns.
On Thursday, Trump doubled down on his stance, reaffirming that these tariffs will go into effect unless his demands are met. He also reiterated a separate threat of 100% tariffs on BRICS nations—which include Brazil, Russia, India, China, and South Africa—if they attempt to create a rival currency to the U.S. dollar in global trade.
JPMorgan analysts suggest that Trump is using tariffs as a bargaining chip to renegotiate trade agreements, particularly with Canada and Mexico, both of whom are part of the United States-Mexico-Canada Agreement (USMCA).
However, analysts warn that dismantling or drastically altering this decades-old free trade zone could shock global markets and disrupt supply chains.
One key takeaway from Trump’s first term was his unpredictable approach to trade policy. Tariff announcements and policy changes often came with little warning, creating uncertainty for businesses and investors alike.
Despite being presented as a move against foreign nations, tariffs don’t directly hurt exporting countries alone. Instead, U.S. businesses pay these tariffs when purchasing goods from abroad. The economic burden can then trickle down to importers, foreign suppliers, and consumers, potentially leading to higher prices on everyday goods.