“Canada and Mexico will suffer severe economic blows from the tariffs President Trump announced on Saturday. Their strategy is to make sure Americans feel the pain too,” the Wall Street Journal reports.
“America’s neighbors to the north and south are much smaller economies, with their combined gross domestic product equaling just one-seventh of the U.S.’s $27 trillion. The tariffs risk pushing the U.S.’s top trade partners into recession, as both nations send 80% of their exports to their bigger partner. The Canadian dollar and the Mexican peso are likely to weaken against the U.S. dollar.”
“Mexico and Canada can’t inflict the same kind of damage on the U.S. economy that the new 25% tariffs on all goods and 10% duties on energy products will on theirs. But they are betting they can inflict enough reciprocal suffering that Trump, who campaigned on lowering prices after a period of elevated inflation, will back down.”
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