US President Donald Trump’s recent threat to impose big tariffs on Canada and Mexico may still pose a significant risk to global trade. Despite a temporary reprieve, the US leader has shown his willingness to use tariffs as a bargaining chip in international negotiations.
In February, Trump threatened to impose 25% tariffs on Canadian and Mexican goods, which could have severely impacted the auto industry that spans both countries. However, after receiving some concessions from Ottawa and Mexico City, he agreed to a 30-day delay.
The agreement included increased security cooperation between the US and Mexico, including an additional 10,000 troops at the border. While the reprieve is temporary, it highlights Trump’s tactics of using tariffs to secure deals that benefit his administration.
This approach has raised concerns among global markets, with many experts warning of a potential “global tax war.” Despite these fears, Trump’s administration remains committed to its goals, including implementing a global minimum corporate tax rate. This initiative aims to address concerns about tax avoidance and ensure fair competition in the global market.
While some may see Trump’s approach as a negotiating tactic, others view it as a recipe for economic instability. As the US leader continues to wield his power of tariffs, it remains to be seen whether he can find common ground with other nations without jeopardizing global trade.
Source: https://www.economist.com/leaders/2025/02/06/its-not-over-donald-trump-could-still-blow-up-global-trade