[Ripcord09]

https://www.youtube.com/watch?v=_-eHOSq3oqI

US President Donald Trump signed three separate executive orders on Saturday, imposing 25 percent on goods from Canada and Mexico, and 10 percent on all imports from China.

Trump said the tariffs were necessary to “protect Americans” and promised to keep the duties in place until what he called a national emergency in the US over the drug fentanyl and undocumented migration ends.

A White House fact sheet said the tariffs would stay in place “until the crisis alleviated”, but gave no details on what the three countries would need to do to win a reprieve.

National Foreign Trade Council (NFTC) President Jake Colvin said Trump’s move threatened to raise the costs of “everything from avocados to automobiles” and urged the US, Canada and Mexico to find a quick solution to avoid escalation.

Canada’s Reaction

Canada’s Prime Minister Justin Trudeau begrudgingly announced Ottawa would respond in kind, putting 25 percent tariffs on up to $155bn in US imports.

“The actions taken today by the White House split us apart instead of bringing us together,” said Trudeau. “We didn’t ask for this, but we will not back down.”

Those tariffs would include American beer, wine and bourbon, as well as fruits and fruit juices, including orange juice from Trump’s home state of Florida, said Trudeau. Canada would also target goods including clothing, sports equipment and household appliances.

Mexico’s Reaction

Mexican President Claudia Sheinbaum on Saturday ordered retaliatory tariffs in response to the tariffs on all goods coming from Mexico. “I’ve instructed my economy minister to implement the plan B we’ve been working on, which includes tariff and non-tariff measures in defence of Mexico’s interests,” Sheinbaum posted, without specifying what US goods her government will target.

Mexico has been preparing possible retaliatory tariffs on imports from the US, ranging from five percent to 20 percent, on pork, cheese, fresh produce, manufactured steel and aluminium, according to sources familiar with the matter. The auto industry would initially be exempt, they said.

China’s Reaction

China will impose tariffs of 15 percent on imports of coal and liquefied natural gas (LNG) from the United States in retaliation for Washington’s 10 percent levies on Chinese goods.

China’s Ministry of Finance also announced on Tuesday that there would be 10 percent tariffs on imports from the US of crude oil, agricultural machinery, large-displacement vehicles and pick-up trucks.

Julien Chaisse, professor at City University of Hong Kong specialising in international economic law, said, The choice of a February 10 start date appears strategic. It allows time for a possible discussion between Trump and Xi which is creating space for last-minute diplomacy before the measures take effect. If talks between the two take place in the coming days, there is room for adjustments, partial exemptions or reciprocal gestures that could prevent a further spiral in trade tensions.”

Pause on tariffs for Canada and Mexico

• US President Donald Trump announced a pause in imposing steep tariffs on Mexico and Canada, which were set to come into effect on Tuesday, for 30 days.
• Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum said they agreed to bolster border enforcement efforts in response to Trump’s demand to crack down on immigration and drug smuggling.
• Trudeau said Canada would deploy new technology and 10,000 police along its border with the US to stop the flow of fentanyl.
• Mexico’s Sheinbaum said her country agreed to reinforce its northern border with 10,000 National Guard members to fight drug trafficking.
• Trump warned he might increase tariffs on China beyond the 10 percent he already announced and he would discuss the matter with President Xi Jinping.

Tariff Against EU

US President Donald Trump has hinted the European Union (EU) could be next to face tariffs, after he slapped 25% levies on goods from Mexico and Canada along with an additional 10% tax on imports from China.

While arriving in Maryland from Florida, Trump told the BBC that tariffs on EU goods imported into the US could happen "pretty soon".

"They don't take our cars, they don't take our farm products, they take almost nothing and we take everything from them. Millions of cars, tremendous amounts of food and farm products," he told journalists.

The US President added he enjoyed good relations with British Prime Minister Sir Keir Starmer, and that trade issues with the UK could be worked out.

Warning to BRICS

"The idea that the BRICS Countries are trying to move away from the Dollar, while we stand by and watch, is OVER," Trump wrote. "We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty US Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful US Economy. They can go find another sucker Nation. There is no chance that BRICS will replace the US Dollar in International Trade, or anywhere else, and any Country that tries should say hello to Tariffs, and goodbye to America!"

The BRICS group - Brazil, Russia, India, China, and South Africa - has been discussing ways to reduce reliance on the US dollar for years. The BRICS economic collaboration has only intensified since Western sanctions were imposed on Russia following its invasion of Ukraine. In recent years, BRICS has expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.

During his campaign, Trump called India a "very big abuser" of trade policies and has now extended similar rhetoric towards other BRICS+ members. He has argued that by increasing tariffs on other countries, he can lower taxes for American businesses and workers, bringing factories back to the US.

Donald Trump’s move to increase tariffs will ultimately hit the consumers. US-based businesses will face paying higher taxes. In most cases, the cost of tariffs is indirectly picked up by consumers as importing businesses are likely to increase the price of said goods to manage the taxes levied.

Do you think these tariffs are good? What’s your take on the whole scenario?

[SmartCat]

That Al Jazeera infographics is way too simplistic. That's not the way the market works and is never like school mathematics. For example, if a pair of Chinese jeans costs $10 and there is 10% tariffs, the landed price of Chinese jeans will indeed be $11. But it may or may not cost the importer $11. What might actually happen is Bangladeshi / Pakistani / Indian textile manufacturers will see an opportunity to sell the same quality pair of jeans for $10.25 or $10.5. And take marketshare away from the Chinese.

So basically, there are 2 "types" of Tariffs:

- Tariffs applied on products, but from all countries
- Tariffs applied only on certain individual countries

The former increases landed price making imports expensive and local production cheaper. This is the model that India typically follows (eg: tariffs on cars). But the latter does not proportionately make imports expensive and local production cheaper. Because other countries now get an opportunity to sell at lower cost than the China/Mexico/Canada. And with enough volumes, that $10.5 or $10.25 jeans from India/Pak/Bangladesh can even be sold at $10.00, because of economies of scale that is achieved when US imports more from them.

Trump's tariff strategy explainer:

- USA applies tariffs on China/Canada/Mexico and gets hit with tariffs in return
- But USA is the stronger economy. If somebody picks up a street fight with a big bully, he might be able to land a few punches. But end of the day, the big bully (USA) will badly thrash the little guy (Canada/Mexico)

So these country-specific tariffs are a gambit that relies on the likelihood that the weaker economic power will look to de-escalate and come to the negotiating table.

Even without that, USA is the largest importer in the world ($4 trillion per year). In a way, USA is the biggest customer. And as they say, the customer is always right. If the seller of product/services does not indulge their customer and accommodate small requests, the customer will go elsewhere. Most of the $4 trillion imports is country-replaceable. Just a small price difference (thanks to tariffs) gives an opportunity for other countries (not under tariff) to gain marketshare in $4 trillion per year market. And when economies of scale (volumes) come into the picture, there will be no price difference between products made in China vs other countries.

[vaibhav_a_a]

The Tariffs are a negotiation ploy. Both Canada and Mexico blinked and put some skin in the game of border protection - a key election promise by Trump. He is a shrewd negotiator that's clear. All he wanted was the neighbors to pay for some of the border protection, look serious (deploy guards etc) which he has achieved in like 3 days (Nasdaq 100 movement on Monday morning US had to be seen to be believed - crashed 2.46% in Intraday and recovered like a rocket the moment POTUS posted on Truth Social and was reported on X). China did not (Xi didn't come to the inauguration either) and has instead countered with their own tariffs in return so they have some coming up- but much lower than the campaign rhetoric.

Now, India is at a low risk of suffering due to tariffs and the face-saving gesture of letting the Indian illegal immigrants be deported in a military plane will allow both GoI and US Govt to show to the world they are on the same side (are they - very debatable).

India's real issue is the tier system put in place by the outgoing Biden admin. We are in tier 2 of AI technology export countries. The lowest, tier 3, is of course China and Russia that no US company can export AI tech (even routed via other countries). The tier 1 (trusted / allied) are 18 countries, including most of Western Europe, Japan and South Korea. Tier 2 (require a validated end user agreement) countries include some middle eastern countries, Mexico, most of south east Asia, almost all of Africa and South America. Till trump reverses it, India will be a bystander in the race for AI and the boom in resultant jobs.

[amitoj]

Originally Posted by SmartCat

What might actually happen is Bangladeshi / Pakistani / Indian textile manufacturers will see an opportunity to sell the same quality pair of jeans for $10.25 or $10.5. And take marketshare away from the Chinese.

Or, China will devalue their currency and negate most of the downside of the tariffs.

Originally Posted by SmartCat

- USA applies tariffs on China/Canada/Mexico and gets hit with tariffs in return
- But USA is the stronger economy. If somebody picks up a street fight with a big bully, he might be able to land a few punches. But end of the day, the big bully (USA) will badly thrash the little guy (Canada/Mexico)

So these country-specific tariffs are a gambit that relies on the likelihood that the weaker economic power will look to de-escalate and come to the negotiating table.

The bigger conglomerates can withstand the impact of tariffs much better than the smaller businesses. The smaller mom and pop shops still feel the pain of the tariffs. Not to forget the impact it would have on inflation.

But the threat of tariffs seems to have been averted for now, because Canada and Mexico have essentially promised what was already being done or was in the plans.

[Turbanator]

Originally Posted by amitoj

But the threat of tariffs seems to have been averted for now, because Canada and Mexico have essentially promised what was already being done or was in the plans.

Mexico will take a larger hit as they have a lot of manufacturing activities. Canada mostly exports natural minerals/ lumbar and some auto parts. Manufacturing vice, Canada is way behind anyone and no longer competitive. I get a feeling that once the new leadership is in place after the elections, Trump will be friendly with Canada again. He does not like Trudeau and a lot of this has to do with him. That's why we saw Trudeau coming in public and putting retaliatory tariffs, unlike Mexico. Let's see what happens next month

[PreludeSH]

US exports nearly $3 trillion and imports $1.9 trillion. Not sure what they are so angry about. Trump might be forgetting that trade is 2 way.

[amitoj]

Originally Posted by Turbanator

Mexico will take a larger hit as they have a lot of manufacturing activities. Canada mostly exports natural minerals/ lumbar and some auto parts. Manufacturing vice, Canada is way behind anyone and no longer competitive.

It was smart of Trudeau to come out and directly address the American public that this is going to hurt them too. Canadians are perceived as some of the nicest people and this tariff business has gotten them up in arms.

It is possible that Mexico and Canada will strengthen their trade relations with non US countries like EU and China to cover the hit from this tariff business. Or, they have realized that it is just a boy crying wolf.

Originally Posted by PreludeSH

US exports nearly $3 trillion and imports $1.9 trillion. Not sure what they are so angry about. Trump might be forgetting that trade is 2 way.

I think US is a net importer, not exporter. As for Trump, dude is selling "trade deficit" as "subsidy" to the American people and half the country is lapping it up!

[volkman10]

How tariffs, if executed, will hurt Americans on car purchase.

- Canadian and Mexican tariffs could increase car prices by almost $6,000

- Many of the most popular cars sold in the US are produced in Canada and Mexico

-Approximately 40% of all vehicles priced under $40,000 could be hit by the tariffs.

-Additionally, 10 of the 20 sub-$30,000 cars sold in the US would feel the brunt.

-It’s not just cars that will be impacted, but many auto parts made overseas too.

- The average tariff on models assembled in Canada or Mexico may increase the cost of these cars by as much as $5,855 apiece.

- Half of the 50 best-selling cars sold in the United States would be impacted by tariffs. These best-selling cars account for roughly 50% of the total market volume.

Link:

[dragracer567]

It’s not just about the tariffs. Overall, it’s one thing about whether the tariffs are justified but there is the question of the overall trend of how Trump deals with allies especially those not led by conservative governments. There is suddenly talk in Canada and the European Union of derisking against the US and questions are even being raised about Canada’s F35’s program. While the smaller powers like Mexico and other Latin American countries will bend to his will, his other Western allies despite trying to appease Trump now will eventually just try to reduce their exposure to the US economy. The Canadians are already saying that this rift might never heal (challenging your sovereignty does that, even if it’s just a tactic like some claim) and they are looking towards closer ties with the EU while the EU itself is looking to balance ties with China - something unimaginable just 2 months ago.

Some might like the ‘take-no-hostages’ attitude of Trump but no country can remain a superpower without allies, these countries followed America into foreign wars, no questions asked and in many instances against their own public opinion and then again bore the brunt of the refugee crisis caused by these conflicts. At this point Trump doesn’t have to leave NATO, 4 more years of this and these countries would leave on their own - which offcourse would be seen as a win for many. This I’d say is the 1971 Nixon’s gunboat diplomacy with India moment for the Canadians and Europeans, this will take a generation to heal if ever.

Link 1

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[am1m]

While I have no deep understanding of international relations, I wonder if the lessons of the past are being forgotten. When a superpower pushes a smaller country too far, there is inevitably another superpower waiting to add them to their fold.

I remember how close we were to Soviet Union in the 80s. Also because the US used to be a lot more hostile to India back then. When I was a kid, we'd get high-quality books, far better than anything printed here in India at throwaway rates across book fairs in Bangalore. Those books did a great job introducing a generation of city kids to the culture of Russia (could be termed propaganda, I suppose). All that changed in the early 2000s and we began to align more closely with the US of course. But I'm sure a lot of us still have fond feelings towards the erstwhile Soviet Union (especially because of children's magazines like 'Misha').

Wonder if we'll see the rise of a China bloc now as Trump inevitably tests established ties and relationships across the globe.

[volkman10]

Affecting India, Ford rethinks India re-entry.

https://www.team-bhp.com/forum/india...ml#post5922234 (Rumour: Ford Endeavour is coming back in 2025)


In USA, Ford calls for 'comprehensive’ tariff analysis for all countries.

- Imports from Japan and South Korea that have little to no duties compared with the 25% tariff President Donald Trump has threatened Canada and Mexico within recent weeks.

- Singled out Toyota Motor and Hyundai Motor for importing hundreds of thousands of vehicles annually from Japan and South Korea, respectively, that have little to no duties compared with the 25% tariff President Donald Trump has threatened imposing on Canada and Mexico.

- Tariffs would mean higher prices for customers.



Ford CEO:

"There’s no question that tariffs at the 25 percent level with Canada and Mexico, if they’re protracted, would have a huge impact on our industry, with billions of dollars of industry profit wiped out, and adverse effects on US jobs as well as the entire value system in our industry"
"We believe, based on our conversations in DC with the Trump administration and congressional leaders, that they are committed to strengthening—not weakening—our nation's auto industry," he said. "That is certainly our expectation."
The issue of tariffs comes amid uncertainty on how the new administration will approach vehicle emissions regulations and electrification. There's also increasing pressure from China, which Farley conceded was building great cars after test driving one himself. But amid the uncertainty, he emphasized that Ford was still in control of its future.

"While we are certainly operating in interesting times, at the end of the day, we control our destiny."

Link:

[dragonfire]

There is a saying in Kerala - kurangante kayyil poomaala kittiyaal". Which translates to "When a garland lands in the hands of a monkey". The problem with entrusting important political offices with people with no political acumen is that they lack the wisdom to make the right decisions. Couple that with an overzealous urge to get something done, and an overcharged voter base wanting to see some "action", we get something called Trump 2.0.

You don't have to look too far into the past to see an equivalent - Just look what Zelensky did with Ukraine.

Am not a Trump hater - I am sure he means well. America definitely have problems, and they have to be dealt with. Biden and his veep slept peacefully while the southern border was left open for anybody to walk in. A couple of weeks ago I met a guy from Gurgaon who told me he paid 48L to "walk" across the Mexico border 3 years ago.

I don't think that this tariff war will last long to make any appreciable impact. Covid already made stuff too expensive (housing costs doubled, food costs became 1.5 times etc). They will absorb the 10-25% hike in cost without much complaint.

[DigitalOne]

Originally Posted by dragracer567

diplomacy with India moment for the Canadians and Europeans, this will take a generation to heal if ever.

Or it may be over in a few months. Canada's elections are due in a few months and the conservative party leader Pierre Poilievre is now leading the opinion polls by a wide margin. He has already been dubbed a Trump puppet for being a conservative, just like Trump was dubbed a Putin puppet .

Wonder if we'll see the rise of a China bloc now as Trump inevitably tests established ties and relationships across the globe.

No. They have their own economic problems and problems. They are not the power they were a decade back. Nobody trusts them enough.

EU is another failing entity. A bunch of nationalistic parties (i.e. not in alignment with EU) in France, Germany, Austria etc have made deep inroads into their national politics.

Every country will just turn inward i.e. "Make <my country> Great Again". It is as simple as that. Which IMO is a good thing.

[SmartCat]

The problem with the theory that those at the receiving end of the tariffs will form their own trading bloc is -> these countries are all great at selling/exporting, but not so much when it comes to importing. For eg, China will not buy Mexican/Canadian automobiles or components, because China has their own industry. China imports only raw materials, commodities and high end electronic machinery/components.

TINA factor at play here. There is no alternative to America!

Originally Posted by amitoj

Or, China will devalue their currency and negate most of the downside of the tariffs.

This might keep other countries at bay, but will result in lower or same prices for US consumers as before. And if $100 can now buy $110 worth of products because of Chinese currency devaluation, isn't this a "victory" for USA?

[dragracer567]

Originally Posted by SmartCat

The problem with the theory that those at the receiving end of the tariffs will form their own trading bloc is -> these countries are all great at selling/exporting, but not so much when it comes to importing. For eg, China will not buy Mexican/Canadian automobiles or components, because China has their own industry. China imports only raw materials, commodities and high end electronic machinery/components.

TINA factor at play here. There is no alternative to America!

This is similar to how China started showing a hissy fit under Xi when everyone freaked out and started de-risking (atleast trying to) from China. Everyone quickly found out that no country can replace China as the world's factory but they did try to have a China + 1 strategy where they hedge their bets though China would still remain the factory of the world.

The US currently holds the same position but as a consumer. For Canada and Mexico, there is no alternative other than the US but for other allies like the European Union, they might try to increase trade with a basket of other countries/groups such as India, China and ASEAN. They might even be ready to provide concessions to India to wrap up the India EU FTA quickly.

Again, as you rightly pointed out, no other countries or groups of countries can replace the US as a consumer, just as no other countries or groups of countries can replace China as an exporter. But the idea would be to make incremental moves however small away from both countries - something unthinkable for China before Xi and for US before Trump. But then again, given just how unpredictable Trump is, this can flip quickly. It might just take one call from Macron to sweet-talk Trump or Germany and Canada (as DigitalOne pointed out below) turning right-wing in the upcoming elections.

Originally Posted by DigitalOne

Or it may be over in a few months. Canada's elections are due in a few months and the conservative party leader Pierre Poilievre is now leading the opinion polls by a wide margin. He has already been dubbed a Trump puppet for being a conservative, just like Trump was dubbed a Putin puppet .

True again but calling him a Trump puppet would be a stretch. Canadian conservatives in general aren't as right-wing as the US, infact they tend to be left of the American left in some matters. However, they are turning right thanks to immigration and a slowing economy. It is true to Trump would be much less likely to try to bully a conservative government.