Donald Trump declares trade war on neighbours with 25% tariffs on Mexican & Canadian goods, sending the dollar soaring
The dollar surged when Donald Trump announced a trade war on the US’s neighbors yesterday.
He announced plans to impose 25% tariffs on commodities from Canada and Mexico.
The president-elect declared that he would put the policy into effect right away until the nations ceased sending illegal narcotics and people to the United States.
As Mr. Trump promised to impose an additional 10% tax on Chinese imports upon his return to the White House, the value of the dollar increased relative to the Mexican peso and the Canadian dollar.
Britain and Europe were spared his promise to defend American industry after he made the announcement on his Truth Social website.
However, it was rumored that terrified British politicians were drafting retaliatory taxes on the importation of Harley-Davidson motorcycles, Levi’s denim, and Jack Daniel’s whiskey.
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Jonathan Reynolds, the trade secretary, emphasized that Britain is ready for everything.
Indeed, it is accurate to state that our businesses would suffer if any nation placed taxes on UK exporters, he said.
Yesterday, the London index dropped 33.07 points to 8,258.61, causing the FTSE 100 to plummet.
The Canadian dollar fell to its lowest level versus the US dollar in four years, and the Mexican peso fell to its lowest level since 2022.
However, the bank ING issued a warning over the tariffs, stating that according to our study, they might cost US consumers up to $2,400 per person annually.
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British companies like the beverage behemoth Diageo may have to increase prices in order to recoup costs as a result of U.S. tariffs on Mexico and Canada.
Diageo, the company behind the Mexican-made tequila brands Don Julio and Casamigos by George Clooney, lost about $1 billion in value yesterday.
A quarter of Diageo’s US sales are of the Canadian whisky brand Crown Royal.
Price increases for American consumers may also lead to price increases for British consumers.
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