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The Wall Street Journal: Trump threatens Canada and Mexico with tariffs to bring auto factories back to the US

80% of the two countries' exports go to the United States and the proposed tariffs will undoubtedly deal a heavy blow to their economies

Jan 22, 2025 05:41 61

The Wall Street Journal: Trump threatens Canada and Mexico with tariffs to bring auto factories back to the US  - 1

The threats of new US President Donald Trump to impose tariffs on goods from Canada and Mexico are aimed at convincing the two countries to renegotiate the trilateral trade agreement (USMCA) ahead of schedule, writes The Wall Street Journal.

The USMCA replaced the North American Free Trade Agreement (NAFTA), which had been in force since 1994, in July 2020 at the initiative of then-President Trump. Under the terms of the agreement, Washington, Mexico City and Ottawa will be able to review some of its provisions in 2026, but Trump expects to do so earlier, the publication's sources are convinced.

According to the publication's sources, the American leader is determined to “use the threat of tariffs to change a number of provisions affecting the auto industry“, including “returning auto factories from Canada and Mexico back to the United States“.

The review of the USMCA will likely be led by the nominee for Secretary of Commerce Howard Lutnick and the nominee for US trade negotiator Jamison Greer.

On November 25, Trump said that on his first day as president he would impose a 25% tariff on all goods from Canada and Mexico in connection with illegal migration and drug smuggling. However, on January 20, Trump clarified that he intended to introduce the tariffs on February 1.

The Wall Street Journal notes that about 80% of Mexico and Canada's exports go to the United States, so the introduction of Trump's promised tariffs would bring serious shocks to these two countries.