Trump tariffs bump on China takes effect, also tariffs on Canada and Mexico

The tariffs bump on China sees it move up to 20% now, from 10% previously. But on the latter i.e. Canada and Mexico, there was some confusion as there was no mention of that when he signed the order yesterday here.

The White House is now out saying that the tariffs will go ahead as planned though here. But I want to highlight on the wording used in the statement. It could just be me or perhaps it is semantics, but with Trump I guess you can never be too sure unless it is made clear. Here’s the potential catch:

The statement reads that “President Donald J. Trump is proceeding with implementing tariffs on Canada and Mexico under the International Emergency Economic Powers Act (IEEPA) to combat the extraordinary threat to U.S. national security, including our public health posed by unchecked drug trafficking”.

And the only part where they actually mention 25% tariffs is in this passage which is just quoting Trump’s message from last year i.e. President Trump promised in November to “sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

I mean, they probably wouldn’t have mentioned that 25% part if it wasn’t. But then again, in last month’s message it was made rather clear as such: “Until the crisis is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff.”

Just some food for thought when reading into the latest statement here. Again, it could be nothing and it is as per what is understood initially. But just in case, it’s worth noting that there might be a catch here.

This article was written by Justin Low at www.forexlive.com.