Trump begins tariff talks with Canada, Mexico amid global stock slump

Photo : Reuters

U.S. President Donald Trump said he will talk with the leaders of Canada and Mexico on Monday about the high taxes he has put on goods coming from these countries. These taxes, called tariffs, have already made world markets fall. The new 25% tax means that American companies must pay extra money when they buy things from Canada and Mexico. Because of this, stock markets in Europe and Asia dropped, and the money value of the Mexican peso and Canadian dollar went down. Oil prices went up, even though Trump put only a 10% tax on Canadian energy to stop fuel prices from rising too much.

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These taxes are not just for Canada and Mexico. Trump also put a 10% tax on Chinese goods. On Sunday night, after coming back from a weekend in Florida, he told reporters that he will speak with Canadian Prime Minister Justin Trudeau and leaders in Mexico to discuss the new rules.

Canada, Mexico, and China are America’s biggest trade partners. All three have said they will fight back when the taxes start on Tuesday. Trump has always said that these taxes would hurt other countries and not affect people in the U.S. But on Sunday, he admitted that Americans may feel some "pain" because of it. He wrote on his Truth Social platform, "But we will Make America Great Again, and it will all be worth the price that must be paid."

Experts believe these taxes will slow down the U.S. economy and make things more expensive, at least for some time. Many people had warned about this, but Trump had always ignored them. However, people in the U.S. were already unhappy about rising prices, which helped Trump win the 2024 election. Ipek Ozkardeskaya, an expert at Swissquote Bank, said that these taxes will hurt America’s economy and make the U.S. dollar weaker. Another expert, John Plassard from Mirabaud Bank, said investors are afraid that the trade war will harm the world economy.

Trump said he made this decision to stop illegal immigration and the smuggling of dangerous drugs like fentanyl. But he also complained about the U.S. buying more from other countries than it sells, something he has always said is unfair. "We’re not going to be the ‘Stupid Country’ anymore," he said.

Trump also made a shocking statement about Canada. On social media, he said that Canada should become part of the U.S. He claimed that America gives "hundreds of billions of dollars" to support Canada and that without this help, Canada "would not survive." He then said, "Canada should become our Cherished 51st State." This is not the first time Trump has made such a statement, and many in Canada were angry. According to the U.S. Census Bureau, America had a $55 billion trade gap with Canada in 2024.

People in Canada reacted strongly. At a basketball game between the Toronto Raptors and the Los Angeles Clippers, videos on social media showed Canadian fans loudly booing when the U.S. national anthem played. Prime Minister Trudeau had already promised to fight back. On Saturday, he announced that Canada will put a 25% tax on some U.S. products worth 155 billion Canadian dollars ($106.6 billion USD). The first set of taxes will start on Tuesday, and more will follow in three weeks. Canada’s ambassador to the U.S., Kirsten Hillman, said Canada is ready to talk but will not stay silent.

Mexico also responded. Mexican President Claudia Sheinbaum said she was waiting for Trump’s answer but had also asked her government to prepare "Plan B." She did not give details, but she said it includes new taxes and other trade measures.

The European Union (EU) is also worried. Trump said he will not put taxes on Britain for now, but he warned that he will "definitely" do it with the EU. EU leaders quickly answered back, saying they will fight against these taxes. Kaja Kallas, a top EU official, said, "There are no winners in trade wars. America needs us, and we need America."

This trade war is happening during a busy and difficult time in Trump’s second term. The U.S. is still in shock after a deadly air accident in Washington, D.C., where an army helicopter crashed into a passenger plane, killing 67 people. At the same time, Trump is making big changes in the government. He created a new office called the "Department of Government Efficiency" and gave control of it to billionaire Elon Musk. Musk’s job is to cut down government spending.

As Trump pushes forward with these major changes, people around the world are watching closely. Many wonder if this trade fight will help America or cause more problems in the future.

Feb. 3, 2025 6:11 p.m. 576

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