Trump starts the American trade war. The president-elect announced during the night, with a post on Truth, that as his first move, as soon as he takes office on January 20, he will sign the order of 25% duties towards his neighbors (Mexico and Canada) and towards China, with additional 10%. This, he specifies, until the three countries stop illegal migratory flows and drug trafficking (known simply as fentanyl). Immediate reactions came from Beijing and Ottawa and from the markets with Asian stock markets closing in the red and European markets falling. And Italy? Hitting Mexico also means damaging Made in Italy.
The announcement aims to target the United States’ major trading partners, which are responsible for about a third of the country’s total trade. In the post, Trump justifies the choice of tariffs as necessary to combat illegal immigration and drug trafficking. The president-elect accused Mexico and Canada of not doing enough to control their borders, while pointing the finger at China for allegedly failing to meet 2023 commitments to stop the export of chemical precursors to fentanyl.
The reactions were not long in coming. China, through its embassy in Washington, called the move a “war without winners”, reiterating that trade cooperation between the two powers is mutually beneficial. Canada also responded, underlining the strength of the bilateral relationship and its commitment to border security, highlighting that 60% of US energy imports come from Ottawa. In Mexico, the president of the lower house, Ricardo Monreal, called the move a direct threat to the country’s economic stability. And there were also immediate repercussions on the financial markets. The Mexican peso lost 2%, hitting a one-year low, while the Canadian dollar fell 1.4%. Asian stock markets were also affected by the announcement, with Tokyo and Shanghai falling sharply and European markets also falling.
The tariff policy also affects Italy indirectly, via Mexico. There are 1,800 Italian companies operating in Mexico, with 300 factories created to produce, at lower costs, mainly for the American market. Names like Ferrero, Pirelli, Brembo, which have invested billions in the region. Ferrero, for example, produces 45 thousand tons of Nutella and Kinder chocolate every year in its San José plant, of which 40% is destined for the North American market. Similar situation for Pirelli, which exports 8 million tires to the United States from Silao, and for Brembo, which has just invested 500 million euros to expand its plant in Escobedo, on which a third of its global turnover depends. Then there are those who can no longer move from Mexico. Campari sends Tequila to the whole world from the Mexican distillery and in the Gulf of Mexico Eni extracts 16 thousand barrels of oil per day which are sent to the global market (but it also has drilling rigs in the United States). Barilla, thanks to its factory in Iowa, would be protected from duties on Mexican imports.
There could also be repercussions for American consumers. Tariffs of 25% risk causing a surge in consumer prices in the United States, fueling inflation and harming American families. Furthermore, trading partners may take countermeasures, further worsening the global economic situation.
