Mexican President Claudia Sheinbaum threatened retaliatory tariffs on US goods yesterday, in response to President-elect Donald Trump's pledged 25% tariffs if Mexico fails to halt the flow of drugs and migrants into the US. Trump also indicated he would impose a 25% tariff on goods from Canada and an additional 10% tariff on goods from China.
The US is the world's largest importer, with Mexico topping its list of trading partners, followed by Canada and China (see list here). The three North American countries exchanged $1.8T worth of goods in 2022; annual US trade with China is $600B. The US is Mexico's top importer, with cars, food, and beer among the goods most likely to be impacted by tariffs. Canada supplied 60% of the US' crude oil, among other goods.
The announcement shook up global markets yesterday, with automakers' stocks especially hard hit. Canadian and Mexican currencies fell against the value of the dollar.
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