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Former U.S. President Donald Trump strengthened his pledge to enforce 25% tariffs on Canada and Mexico while mentioning his fear about fentanyl drug shipments and trade unbalance with these countries. The financial markets displayed extreme volatility as Trump planned to release the official measures on February 1.

The peso fell more than 1% and the dollar lost over 1% after Trump declared that gold prices reached their highest recorded level due to safety investment interest and expectations of trade limitations.

Trump’s Justification for the Tariffs

During his speech in the Oval Office on January 30 Trump gave three essential explanations for the tariff policies.

Large numbers of unauthorized people continue to flow into America at relatively high levels.America battles a drug crisis which includes the fentanyl epidemic together with “The drugs, fentanyl, and everything else that have come into the country.”Through his declaration Trump pointed out that U.S. support of Canada and Mexico takes the form of substantial deficit spending.

He reiterated that America does not need the imports from Canada and Mexico which includes their oil and lumber products.

The United States does not require their available goods and products. Our nation possesses all the required oil supply. Our production capacities include every type of tree required.After his statement WTI crude futures surged above $73 per barrel together with the U.S. dollar recovering its earlier losses.

Uncertainty Over Tariff Levels

Trump failed to declare either way what the final tariff level would be but did keep a possibility of future increases open.The current levels could become higher but they may also remain unchanged with the passing time.

The Canadian government announced previous plans to start retaliatory measures if the United States chose to impose tariffs against them.President Trump Directs His Attention Against China Due To The Fentanyl Trafficking Situation.

During his public statements Trump mentioned China as a probable target for new trade restrictions which he connected to the United States' fentanyl drug crisis.

China faces my attention because they transmit fentanyl throughout America which produces hundreds of thousands of deaths there.

New tariffs directed at China are currently under development according to him.

The tariff against China is currently under development while the country will eventually need to pay the imposed tax.

Market Reactions and Economic Implications

The immediate economic impact occurs because of Trump's threats to impose tariffs against China.Brokerage clients preferred holding gold because of its status as a dependable investment.
The Mexican peso together with the Canadian dollar suffered more than 1% loss after investors chose uncertainty.


The market value of oil increased after Trump delivered his comments on how the United States would become energy self-sufficient.

The implementation of protective assessments would activate severe trade conflicts and retaliatory moves from trade partners which in turn would result in economic instability. Global financial stability and international relations with the United States will be under special investigation as the 2024 presidential election draws near because of Trump's current trade policy direction.