₦airaland Forum

New York, CNN — President Donald Trump, with the stroke of a pen, could plunge America’s closest neighbors into recession.

Trump, on his first day in office, suggested he may do just that. Trump has threatened to impose 25% tariffs on all goods from Canada and Mexico on February 1 in response to what he views as inadequate border security failing to stop drugs and migrants from coming into the United States.

Spiking tariffs on Canada and Mexico would risk starting a full-blown trade war inside the deeply interconnected North American economy, where delicate supply chains have built close ties over the past several decades.

It would be a risky gamble for Trump, one with massive implications for the entire continent – and a test for the three neighboring nations, all of which have new or transitioning leadership.

Economists say that the tariffs, should they materialize, would swiftly send the Canadian and Mexican economies into recession and likely lift consumer prices for Americans on cars, gasoline and other imported items.

“This would be a real trade war, not a trade skirmish. This is serious. You would see job loss and people lose their homes,” said Joe Brusuelas, chief economist at RSM.

That’s why some on Wall Street believe Trump is bluffing. Investors are not dumping stocks. CEOs are not panicking. Economists have not dimmed their growth forecasts.

After all, starting a North American trade war would undermine Trump’s promises to turbocharge the US economy and attack the cost of living.

It would risk unraveling the massive gains in the stock market, which Trump views as a real-time report card of sorts. And the Federal Reserve could feel compelled to keep interest rates high for longer, preventing the mortgage rate relief that Trump seeks.

AImiron:
CNN

WrriterNg:
D

sunboy:
Throw them in recession and spike the inflation by 25%
Its a lose-lose situation. Somebody still don't know how tariffs work.