US President-elect Donald Trump announced on Monday that high tariffs will be imposed on goods from Mexico, Canada and China from the first day of his administration. Trump announced plans to impose an additional 25% tariff on all products from Mexico and Canada and 10% on Chinese products.
According to a study by the National Retail Federation (NRF), such tariffs could cause a loss of USD 78 billion in the annual purchasing power of American consumers. Serious price increases are expected in sectors such as clothing, furniture and white goods. Jonathan Gold, NRF's supply chain expert, pointed out that high import costs are usually reflected on consumers, emphasising that these taxes will negatively affect low-income households.
Although China's direct steel exports to the US are limited, indirect exports such as steel used in sectors such as automobiles and machinery are expected to be affected. Following the decrease in demand in Europe and the US, China shifted its steel exports to Africa, Latin America and Southeast Asia. These regions account for 38% of China's steel exports.
Trump's tariffs may further strain global trade. However, China's strong domestic demand and focus on diversified export markets may recover some losses.
Following Trump's statements, the Canadian dollar and Mexican peso depreciated against the US dollar. Asian stock markets also declined, while Japan's Nikkei 225 index decreased by 1.59%.
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