Donald Trump has announced that he will impose new tariffs on China, Mexico and Canada on his first day in office, to force them to crack down on illegal immigration and drug trafficking into the United States.
The US president-elect has announced that he will sign an executive order imposing a 25% tariff on all goods from Mexico and Canada after his inauguration on January 20, 2025.
He also said, “We will impose an additional 10% tariff on China, on top of any additional tariffs” until it cracks down on fentanyl smuggling.
The threat could mark a major escalation of tensions with the US’s three largest trading partners. It could also lead to higher prices for Americans, as the tariffs function as a form of tax on imports.
The US is the world’s largest importer. China, Mexico and Canada account for about 40% of the $3.2 trillion (£2.6 trillion) worth of goods they import each year, according to official data.
China has defended its efforts to stem the flow of illegal drugs and warned there could be no winners in a trade war between the two countries.
After threatening tariffs, Trump spoke with Canadian Prime Minister Justin Trudeau for about 10 minutes, discussing trade and border security, a Canadian government official told the BBC. They had a “good discussion,” the source said.
During the call, Trudeau stressed that the number of migrants crossing the Canadian border was far lower than the US-Mexico border, the official said.
Mexico’s finance ministry said: “Mexico is the United States’ largest trading partner, and the USMCA provides a framework of certainty for domestic and international investors.” »
President Claudia Sheinbaum suggested Tuesday that Mexico could retaliate with its tariffs after U.S. President-elect Donald Trump threatened to impose 25% import duties on Mexican goods if the country did not stop the flow of drugs and migrants across the border.
Sheinbaum said she was open to discussions on the issues, but said drugs were a U.S. problem.
“One tariff would be followed by another in response, and so on until we put common businesses at risk,” Sheinbaum said, referring to U.S. automakers that have plants on both sides of the border.
Sheinbaum said Tuesday that Mexico had done much to stem the flow of migrants, noting that “migrant caravans are no longer reaching the border.” However, Mexico’s efforts to combat drugs like the deadly synthetic opioid fentanyl — which is made by Mexican cartels using chemicals imported from China — have weakened over the past year.
Sheinbaum said Mexico is suffering from an influx of weapons from the US and that drug trafficking “is a public health and consumer issue in your country’s society.”
Sheinbaum also criticized US spending on arms, saying the money should instead be spent regionally to address migration. “If a percentage of what the US spends on war were spent on peace and development, that would address the underlying causes of migration,” she said.
Trump also said he would end China’s most-favored-nation trade status with the United States — the most favorable terms Washington offers on tariffs and other restrictions.
Last year, more than 80% of Mexico’s exports went to the United States, while about 75% of Canada’s exports went to its southern neighbor.
Even after years of a bitter trade war between the world’s two largest economies, the United States still accounts for about 15% of China’s exports.
China’s bonds in Riyadh and what it means to investors.
China issues $2 billion in dollar bonds in Riyadh and the financial world is taking notice. This unprecedented move has attracted over $40 billion in orders, reflecting significant investor confidence in the Chinese and Saudi economies. But why did China choose Riyadh over established financial hubs like London and New York?
This strategic move underscores the deepening economic ties between China and Saudi Arabia and marks Riyadh’s emergence as a global financial player.
Understanding the significance of China’s bonds in Riyadh
China’s decision to issue $2 billion in dollar bonds in Riyadh is more than just a financial transaction; it’s a strategic move that speaks volumes. For investors, it signifies a shift in the global financial landscape. By selecting Riyadh, China recognizes Saudi Arabia’s growing financial markets and the country’s Vision 2030 goal of becoming a leading financial center.
In addition, the strong investor response, exceeding $40 billion in orders, underscores the strong confidence in Chinese bonds and Riyadh’s potential as a financial center. The move also reflects a deepening economic partnership between China and Saudi Arabia, paving the way for future collaborative investments that align with initiatives such as the Belt and Road Initiative.
Benefits of Chinese Bonds for Saudi Arabia
Strengthening Riyadh’s Position: The choice of Riyadh over traditional financial centers demonstrates international confidence in Saudi Arabia’s financial markets. This includes supporting Riyadh’s Vision 2030 goal of establishing itself as a leading global financial center.
Deepening Economic Relations: The move underscores the growing economic partnership between two major trading nations. It also paves the way for new investments and collaborations that align with the strategic goals of both nations.
Diversifying the economy: By attracting the interest of global investors, Saudi Arabia can accelerate the diversification of revenue sources beyond oil.
Attracting foreign capital with Chinese bonds
Attracting global investors: Issuing bonds attract the interest of international investors. This increases capital inflows into Saudi Arabia, positioning it as a new investment hub in the Middle East.
Strengthening economic sovereignty: Riyadh’s choice over traditional Western financial centers reflects a shift toward greater independence. This plays a huge role in strengthening Saudi Arabia’s role in forming new economic alliances.
Facilitating knowledge transfer: Hosting such issuances helps build Saudi expertise and improve capabilities in managing global financial operations, thereby fostering long-term growth.
Implications for Global Investors in Chinese Bonds
China’s choice of Riyadh for its dollar bond issuance is a clear signal of Saudi Arabia’s growing economic influence. Not only that, but also its central role in the evolving global economic landscape. The move is not just a financial step; it is part of a strategic vision to position Saudi Arabia as a leading global financial and investment hub. For global investors, it presents new opportunities to engage in emerging markets and explore the potential of Chinese bonds in the Middle East.
Trump Truimph Global and U.S. Stock Market Reaction
The 2024 U.S. election results signal potential shifts across economic and policy landscapes, impacting various market sectors. With … Continue reading – Trump Truimph Global and U.S. Stock Market Reaction
