{"id":3416,"date":"2024-11-27T17:42:00","date_gmt":"2024-11-27T17:42:00","guid":{"rendered":"https:\/\/www.bocintl.com\/web\/?p=3416"},"modified":"2024-11-27T17:42:01","modified_gmt":"2024-11-27T17:42:01","slug":"blast-506-trumps-tariff-threats-shake-markets","status":"publish","type":"post","link":"https:\/\/www.bocintl.com\/web\/blast-506-trumps-tariff-threats-shake-markets\/","title":{"rendered":"Blast #506 &#8211; Trump&#8217;s Tariff Threats Shake Markets"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"170\" src=\"https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-1024x170.png\" alt=\"\" class=\"wp-image-3417\" srcset=\"https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-1024x170.png 1024w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-300x50.png 300w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-768x127.png 768w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-1536x255.png 1536w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-2048x340.png 2048w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-280x46.png 280w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/Imagen1-4-1320x219.png 1320w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"416\" height=\"149\" data-src=\"https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/image-5.png\" alt=\"\" class=\"wp-image-3419 lazyload\" data-srcset=\"https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/image-5.png 416w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/image-5-300x107.png 300w, https:\/\/www.bocintl.com\/web\/wp-content\/uploads\/2024\/11\/image-5-280x100.png 280w\" data-sizes=\"(max-width: 416px) 100vw, 416px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 416px; --smush-placeholder-aspect-ratio: 416\/149;\" \/><\/figure>\n<\/div>\n\n\n<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-align-center\"><strong>Trump\u2019s Tariff Threat to Top US Trading Partners Roils Markets<\/strong><\/h2>\n\n\n\n<p class=\"has-text-align-center\"><em>By Nancy Cook and Brian Platt<\/em> <em>Source: Bloomberg<\/em><\/p>\n\n\n\n<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>President-elect cites flow of drugs, people across US borders<\/li>\n\n\n\n<li>Republican has vowed to tighten border security in second term<\/li>\n<\/ul>\n\n\n\n<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.<\/p>\n\n\n\n<p>President-elect&nbsp;Donald Trump&nbsp;vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the US\u2019s top trading partners since his election win three weeks ago.<\/p>\n\n\n\n<p>Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada, in&nbsp;<a href=\"https:\/\/oytfejhbb.cc.rs6.net\/tn.jsp?f=001EJfl_dqp62ZtM24adNUtTGskwszXTzO20TpRv0wSzbrVV7hRA41ApSFV94npLLIFtUUsHyNYmtX8FMUmwESmmwg6dCpo-xE9MkgYG6xWaHdJogxe9gUgaVjgUvswLdoCwOuSX5_9-PSx7j-7uZPpFIURzZAgGcNob_XnROSEiis-BXEMIosUIw==&amp;c=-K4JPMhtXDNvzxVocpVZzA_0Rsj8gB-CaBWRyhAj__m8vwA0CAVrRg==&amp;ch=uy6M5bX01KdFgXsGyZWQX9aV2BvtUB7U43rnw5bjxjleuCJ_Jl8x-g==\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>posts<\/strong><\/a>&nbsp;to his Truth Social network on Monday.<\/p>\n\n\n\n<p>The&nbsp;US dollar&nbsp;staged a broad advance Tuesday, with the Mexican peso and the Canadian dollar among the worst performers. US&nbsp;Treasuries&nbsp;fell, with the yield on 10-year notes rising two basis points to 4.3%, partially reversing the reaction to&nbsp;Scott Bessent\u2019s nomination last week as Treasury secretary, which weighed on the dollar and boosted US bonds amid optimism of a more&nbsp;<a href=\"https:\/\/oytfejhbb.cc.rs6.net\/tn.jsp?f=001EJfl_dqp62ZtM24adNUtTGskwszXTzO20TpRv0wSzbrVV7hRA41ApSFV94npLLIFeJr4vIWclBeFnkN6oCVJmzDcOHhiwCeVr0blS1J-NESFL5FKN_SyGnKTquWqHQcQSf0UZPLX-As8iGM62FgFmhJ3M7J83q5RSwUfneatnCAP1Gp7WkdVIUKv0QE9e_jkGelAnhXxcnW3dWQq7FQ_wFV7sxC0uVgxVYTxAOE5_z6DS4La7o5wMilc2ssQAViPTs0mFSUfD6XeWC8CLNVxMA==&amp;c=-K4JPMhtXDNvzxVocpVZzA_0Rsj8gB-CaBWRyhAj__m8vwA0CAVrRg==&amp;ch=uy6M5bX01KdFgXsGyZWQX9aV2BvtUB7U43rnw5bjxjleuCJ_Jl8x-g==\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>measured approach<\/strong><\/a>&nbsp;to trade relations.<\/p>\n\n\n\n<p>Trump\u2019s market-moving threats were a stark reminder that he plans to wield tariff authority, or at least threaten to use it, as leverage against allies and adversaries alike. It\u2019s another sign of his break from the international order where low tariffs are the goal and rules exist to discourage overreach of punitive trade actions.<\/p>\n\n\n\n<p>In his Truth Social posts, Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders.<\/p>\n\n\n\n<p>He accused China of failing to follow through on promises to institute the death penalty for traffickers of fentanyl, writing that \u201cdrugs are pouring into our Country, mostly through Mexico, at levels never seen before.\u201d<\/p>\n\n\n\n<p>\u201cUntil such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,\u201d Trump said.<\/p>\n\n\n\n<p>In another post, the incoming president also vowed to hit Mexico and Canada with a 25% tariff on \u201cALL products,\u201d saying he would sign an executive order to that effect on his first day in office.<\/p>\n\n\n\n<p>\u201cAs everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,\u201d he said. \u201cThis Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!\u201d<\/p>\n\n\n\n<p>Shortly after Trump\u2019s post, Canadian Prime Minister&nbsp;Justin Trudeau&nbsp;contacted the president-elect and the two leaders had a phone call to discuss border security and trade, according to a government official with knowledge of the matter.<\/p>\n\n\n\n<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.<\/p>\n\n\n\n<p><strong>Immigration Response<\/strong><\/p>\n\n\n\n<p>Trudeau pointed out to Trump that the number of migrants who cross the Canadian border into the US is minuscule compared to those who cross from Mexico, said the official, who spoke on condition of anonymity.<\/p>\n\n\n\n<p>Canada <strong>said<\/strong> it\u2019s working closely with US law enforcement agencies every day to disrupt the \u201cscourge of the fentanyl coming from China and other countries,\u201d according to a statement by Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.<\/p>\n\n\n\n<p>Liu Pengyu, spokesman for the Chinese embassy in the US, said economic and trade cooperation between both countries is mutually beneficial. \u201cNo one will win a trade war or a tariff war,\u201d he wrote in an <strong>X post.<\/strong><\/p>\n\n\n\n<p>The Foreign Ministry in Beijing said in a <strong>statement<\/strong> Tuesday that China has provided support to America\u2019s fight against fentanyl which is \u201cUS\u2019s problem,\u201d though it stopped short of mentioning any planned trade retaliation.<\/p>\n\n\n\n<p>Representatives for the Mexican Foreign Affairs Ministry and Economy Ministry, as well as China\u2019s Commerce Ministry, didn\u2019t immediately respond to requests to comment. Spokespeople for Trump didn\u2019t immediately answer a question about whether there would be exemptions from the duties.<\/p>\n\n\n\n<p>UBS Global Wealth Management\u2019s Kelvin Tay says the announcement of additional trade tariffs on China is not surprising. He adds that the next round of tariffs will \u201clikely be more nuanced\u201d as some Chinese exports to the US are hard to substitute.<\/p>\n\n\n\n<p>Trump campaigned on pledges to implement sweeping tariffs, vowing to hike tariffs to 60% for all goods imported from China and as high as 20% for those brought in from the rest of the world \u2014 policies he says will help pressure companies to re-shore manufacturing jobs in the US and raise revenue for the federal government.<\/p>\n\n\n\n<p>President Joe Biden has already <strong>hiked tariffs<\/strong> on a variety of Chinese imports this year, including semiconductors, solar cells and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The move was the culmination of a review of Trump\u2019s tariff increases in his first term \u2014 none of which were rolled back.<\/p>\n\n\n\n<p>While it was unclear how Trump\u2019s 10% tariff threat on China fit in with his previous statements calling for even higher duties, analysts saw this as an opening gambit aimed at the drug problem.<\/p>\n\n\n\n<p><strong>China\u2019s Response<\/strong><\/p>\n\n\n\n<p>This \u201cdoes not necessarily mean that Trump\u2019s promised 60% tariffs on all Chinese imports are off the table,\u201d said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute\u2019s Center for China Analysis. \u201cChina will register its opposition and consider limited retaliation but is likely to respond cautiously at first to Trump\u2019s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term.\u201d<\/p>\n\n\n\n<p>While public health experts say fentanyl overdoses remain a major issue, provisional data released earlier this month by the Centers for<strong> Disease Control and Prevention<\/strong> showed a 14% drop in drug overdose deaths from June 2023 to June 2024. President Biden <strong>hailed<\/strong> US-China cooperation on counter-narcotics this month during a meeting with counterpart Xi Jinping in Peru.<\/p>\n\n\n\n<p>Higher North American tariffs would upend the auto industry and other consumer sectors, including food, in which the three countries are highly integrated.<\/p>\n\n\n\n<p>Mexico\u2019s auto sector is particularly exposed to a trade conflict with the US, along with factories that export electronics, plastics and other manufactured goods to US consumers. Mexico became the US\u2019s largest trading partner as China\u2019s import share declined in recent years. The Mexican government estimates there\u2019s now $800 billion annually in total trade between the nations.<\/p>\n\n\n\n<p><strong>\u2018Stir the Debate\u2019<\/strong><\/p>\n\n\n\n<p>The Canadian and US auto industries are so intertwined, and work on such thin profit margins, that a 25% tariff is \u201cnot a real conversation,\u201d said Flavio Volpe, president of the Automotive Parts Manufacturers\u2019 Association, a Canadian industry group.<\/p>\n\n\n\n<p>\u201cThe president-elect has done what he\u2019s famous for, which is try to stir the debate. The only surprise is how early he\u2019s done it,\u201d Volpe said. \u201cWhat we learned in the first term was he uses strong rhetoric, public rhetoric. But the negotiations are always tough, but reasonable \u2014 and I\u2019m just telling everybody to be patient.\u201d<\/p>\n\n\n\n<p><strong>Canada&#8217;s Exports to the US<\/strong><\/p>\n\n\n\n<p>Energy, motor vehicles and consumer goods account for 57% of exports<br>Source: Statistics Canada, Bloomberg calculations<\/p>\n\n\n\n<p>A 25% tariff applied to all imports from Canada would put pressure on energy costs. Oil, gas and other energy products are Canada\u2019s largest export to its southern neighbor; it\u2019s by far the largest external supplier of crude to the US. Wilbur Ross, Trump\u2019s former Commerce secretary, said earlier this month it would make no sense to place tariffs on Canadian energy.<\/p>\n\n\n\n<p>The move on Mexico and Canada would reignite a trade feud that simmered across the continental bloc during Trump\u2019s first term, where he forced a renegotiation of the North American Free Trade Agreement and imposed tariffs on certain sectors, including steel.<\/p>\n\n\n\n<p>Currently, the re-branded trade pact, known as the United States-Mexico-Canada Agreement, allows for duty-free trade across a wide range of sectors.<\/p>\n\n\n\n<p>It\u2019s not clear what recourse American importers, who would pay the duties, would have under the pact to head off any levy.<\/p>\n\n\n\n<p>Beyond Bessent, Trump still has a number of top economic roles to fill in his administration. One of the chief architects of Trump\u2019s tariff agenda, former United States Trade Representative Robert Lighthizer has yet to land a role in the second term.<\/p>\n\n\n\n<p><em>\u2014 With assistance from Constantine Courcoulas, Josh Wingrove, Matthew Burgess, Carolina Millan, Maya Averbuch, Colum Murphy, Jing Li, Josh Xiao, Philip Glamann, Cormac Mullen, and Derek Decloet<\/em><\/p>\n\n\n\n<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. Trump\u2019s Tariff Threat to Top US Trading Partners Roils Markets By Nancy Cook and Brian Platt Source: Bloomberg \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. President-elect&nbsp;Donald Trump&nbsp;vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the US\u2019s top trading partners since his election win three weeks ago. Trump said he would impose<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[507],"tags":[],"class_list":["post-3416","post","type-post","status-publish","format-standard","hentry","category-the-boc-blast"],"_links":{"self":[{"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/posts\/3416","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/comments?post=3416"}],"version-history":[{"count":1,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/posts\/3416\/revisions"}],"predecessor-version":[{"id":3420,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/posts\/3416\/revisions\/3420"}],"wp:attachment":[{"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/media?parent=3416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/categories?post=3416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bocintl.com\/web\/wp-json\/wp\/v2\/tags?post=3416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}