🇨🇦🇺🇸🇲🇽 Countdown to a North American Trade War

What happens after Feb. 1?

Tomorrow, a North American trade war may erupt.

On February 1, Trump is expected to begin his first major trade action on the world stage, slapping a 25% tariff on imports from Canada and Mexico, a number that Trump said could increase in the future. This has ignited fears across the board, particularly as Trump surrounds his tariffs with talk of making Canada the 51st state. This idea garnered laughs just a short time ago but is now raising eyebrows after Trump warned he would use “economic force” to potentially take over America’s northern neighbor.

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Consider the state of play so far:

• The Canadian government is preparing a stimulus package that could rival what Ottawa unveiled during the height of the pandemic to sustain Canadian people and businesses through a trade war with America. Canada’s total spending to battle COVID-19 was almost $360 billion, equal to the GDP of New Zealand and Croatia combined.

• The Mexican government is warning of massive retaliation, refusing to bend to America’s tariffs. While Mexico is not revealing its moves, it has said it could cause 400,000 American jobs to disappear. Separately, Ottawa has warned of “tit-for-tat” tariffs that could be imposed almost immediately after Trump’s 25% levy takes effect. Canada could target exports from key American states that raise the political heat on Trump.