Global markets are preparing for chaos before Trump’s tariff for Canada and China
President Donald Trump’s tariff that was announced during the weekend – as well as the promise of more punishment measures directed against some of the closest commercial partners in Washington – disturbed the allies and superior markets about what some fear may turn into a global trade war.
While most world leaders were cautious about drawings against Canada, Mexico and China, economists say consumers all over the world will face dilapidated prices as supply chains that move goods between countries become more vulnerable to political risks and therefore more expensive.
Chrycytia Freland, a competition to be the Prime Minister of Canada, told MSNBC “Morning Joe” on Monday that Trump’s actions were “a huge work of self -harm”, because the measures will also harm the American exporters trying to sell goods to Canada.
She said: “The truth is that these definitions are really imposed without completely reason.” “We think he is completely crazy and we are also really angry at you.”
But the responses from most of America’s allies, fearing that they may also be the axis of the Trump administration tariff, were more moderate than Freeland, although this is not uncommon for experienced leaders in the style of the negotiating president.
The European Union said that it will “respond firmly” if Trump hit her with definitions and that he “regrets” the duties that he has imposed so far. Japan said it would “study carefully” the potential impact on global trade.
Independent experts – who have no direct work with Trump over the next four years – were more easy to analyze.
“What was considered a trick and a trick from Trump had turned into a difficult, difficult reality,” Susanna Striter, head of money and markets on the British investment platform, said in an email on Monday. “It has become clear that Trump’s way of doing business is to plant chaos and the inability to predict the acquisition of local political victories.”
The preserved promises
Trump’s tariff, which is scheduled to enter into force on Tuesday, is not a surprise, given that the president has repeatedly sending them during the 2024 election campaign.
He has long saw a commercial deficit – the countries that sell more to the United States more than they buy – as a wealth to subsidies, and he has been constantly cited in his attempts to carry countries to buy more American goods, with a sign of illegal immigration crisis on the southern border and the flow of fentanel The illegal who killed tens of thousands of Americans, as other reasons for their imposition.
Some of the president’s allies – including Treasury Secretary Scott Payette – suggested that the definitions be used mainly as a negotiating tactic to gain favorable deals, instead of the option of practical policy.
“The customs tariff rifle will always be downloaded and at the table, but it is rarely drained,” Bessent wrote to investors in the hedge fund for the Square Square Group last year.
However, at the end of this week, Trump achieved and promised Trump, and announced for the first time on Saturday a 25 % tariff for Canadian and Mexican goods and a 10 % tariff for the Chinese.
While Mexican President Claudia Shinbum said on Monday that after a conversation with Trump, the planned definitions were suspended for a month, other parts of the world are also preparing for similar fees, not the least of which is the European Union.
Trump told reporters at Maryland on Sunday, the European Union’s Trade Union was unable to “terrify.” Among them. “.
European response
A spokesman for the bloc said in a statement on Monday that the European Union “will respond firmly to any commercial partner that imposes unfairly or arbitrarily the tariff on the goods of the European Union.”
Julian Henz, director of commercial policy research at the Keel Global Economy Institute, a German research center, said the Trump administration “seems to be a right to threats.”
However, Europe itself is hardly uniform on this issue. The traditional prevailing political parties of the mass were subjected to pressure from right-wing populists, many of whom share Trump’s hatred with the global trade system that-besides immigration-causes jobs in manufacturing and other industries.
But German Chancellor Olaf Schools defended globalization on Sunday, saying that she “proved that she is a wonderful success story that caused our prosperity to all of us” and “for this reason it is important not to divide the world now with many habits of barriers.”
On the same day, the German auto giant in Volkswagen said in a statement that “constructive talks have been relied upon between commercial partners to ensure security and economic stability and avoid commercial conflict.”
Asian markets earthquake
While the company was seeking to calm the water, investors pointed to their concerns about non -American auto manufacturers.
With VW shares drop by more than 5 % on Monday, the Japanese Korean giants and South Koreans such as Toyota, Nissan and Honda have also seen the prices of their shares also decrease, as investors are looking for Mexican factories that export cars to the United States
In Taiwan, which many semiconductor companies and electronic companies have factories in Mexico and China, the Ministry of Economic Affairs said on Monday that it will help companies affected by American definitions, including providing information on how to move to America.
While Asian allies in the United States, such as Japan and South Korea, were not defined, they are not in danger of the effects of these fees on their global companies.
“We have to think carefully about the reason behind this decision and what is its effect,” Japanese Prime Minister Shigro Eshiba told legislators on Monday. “At the same time, Mr. Trump often uses the word” fair “. We will carefully study how this national interests of the United States and also how this can affect global free trade.”
Worse than expected
The silent Shigero reaction chanted the effects of his European counterparts and moderate collective reactions to the allies who have long presented may hide the fact that Trump’s actions are “worse than expected,” according to David Heinj, director of the European Center for International Political Economy, said a research tank based in Brussels.
Henig said that European powers “expected Trump wanted deals.” “But now he seems to say,” I want definitions. The more definitions, the better. This leaves the rest of the world, which is used for trading, with major issues. “
Henig said that what causes most of the alert in the European corridors of power is Trump’s willingness to take action against Northern Washington’s neighbor.
People say, “Wait a minute, the United States takes in Canada? “If you are going to put a high tariff in Canada, frankly, it appears that anyone may be threatened. It seems that there is no rhyme or reason for that. “
There today, here tomorrow
European and Asian allies in America may have been affixed to the financial markets on Monday, as the Trump administration tariff had already been affected by the value of Mexican and Canadian assets.
The Mexican and Canadian dollar has slipped in early trading on Monday, and the latter fell to the lowest value against the US dollar since 2003.
Although Canadian Prime Minister Justin Trudeau has already announced revenge definitions against a group of American goods, China was more restricted.
While Beijing’s reaction was quickly to Trump’s tariff during his first term, he has not yet determined how he planned to take revenge on saying that she would file a lawsuit with the World Trade Organization and the age of “necessary counter -measures”.
However, there may be an opportunity to chaos for Chinese President Xi Jinping – who is trying to correct his country’s economy.
“China will develop Trump’s tariff as unilateral and annoying, casting China as a multilateral hero and global economic stability,” said Craig Singonon, a Chinese fellow at the Defense Defense Foundation in an e -mail.
“She can take advantage of this moment to deepen partners with emerging markets and put China as an alternative to American leadership.”