Tariffs on China remain despite pause on Mexico and Canada
The Trump administration has announced it will publicly implement tariffs on goods from Canada, Mexico and China, citing reasons such as the fentanyl crisis and illegal immigration as justifications. However, they are widely viewed as a tool to address trade imbalances and bolster domestic industries (see the below chart). This Insight focuses specifically on the impact of a potential US-China Trade War 2.0 on the Chinese economy, particularly considering the sudden pause in tariffs impacting Canada and Mexico, just one day after their implementation and China’s newly implemented countermeasures.
These developments raise questions about US trade strategy. While the halt may be for negotiations or reassessment, it underscores continued trade tensions and the potential for future tariff actions. It also highlights the centrality of the US-China trade relationship, as tariffs on Chinese goods remain in place.
We’ll be monitoring these dynamics, helping our clients to better understand the impact on the commodity market. If you are keen to hear more about our views on China and the global economy, please refer to our CRU's Global Economic Outlook - email sales@crugroup.com if you're interested.
