Overview

• President-elect Donald Trump announced plans for a 25% tariff on imports from Canada and Mexico, citing the need to curb drug trafficking and illegal immigration.
• Canadian Prime Minister Justin Trudeau has initiated talks with opposition leaders and met with Trump at Mar-a-Lago, but no assurances were given to halt the tariffs.
• Economists warn the tariffs could significantly raise consumer prices, disrupt supply chains, and harm industries reliant on cross-border trade, particularly in Texas and border regions.
• Canada, heavily reliant on U.S. trade, faces challenges in diversifying its export markets, with relations with China and India strained due to recent diplomatic and trade disputes.
• Mexico has signaled potential retaliatory tariffs and disputes the characterization of its efforts to stem migration and drug trafficking as insufficient.