Trump Adjusts Tariffs: Impact on Canada, Mexico, and Argentina
President Trump temporarily rolled back tariffs on Canada and Mexico but maintained tariffs on steel and aluminum affecting Argentina. These trade decisions arise from backlash in global markets and may hinder Argentina’s economic prospects and aspirations for a free-trade agreement with the U.S.
President Donald Trump has recently announced a temporary rollback of tariffs imposed on trade with Canada and Mexico, following significant backlash from global markets. This decision aims to ease pressure on companies and consumers impacted by tariffs of up to 25 percent, which took effect Tuesday and subsequently caused stock market declines. Despite these adjustments for Canada and Mexico, Trump affirmed that tariffs on steel and aluminum will remain unchanged, set to begin on March 12, 2023.
The decision to modify tariffs on neighboring countries reflects efforts to address economic concerns, although Trump has refuted claims of any direct correlation between his trade policies and market fluctuations. The suspension of tariffs affecting Canada and Mexico will last until April 2, 2023, when Trump intends to provide updates regarding “reciprocal tariffs” deemed necessary by Washington. The emphasis, however, remains on maintaining steel and aluminum tariffs, which will significantly impact Argentina, causing unease for its President Javier Milei, who seeks a free-trade agreement.
Argentina’s annual steel and aluminum exports to the United States are valued at approximately $600 million. The INDEC national statistics bureau reported that bilateral trade yields a surplus of $228 million, largely due to a 27.9 percent reduction in U.S. imports during Argentina’s recession. Nonetheless, Trump’s imposition of tariffs with the goal of bolstering local production could hinder Argentina’s economic growth, casting doubt on Milei’s prospects for a trade accord with the U.S.
Securing a free-trade agreement with Washington would likely necessitate Argentina’s exit from the Mercosur regional trade bloc, where it currently holds 13 agreements. In comparison, neighboring Chile, which is not part of Mercosur, has established over 700 trade agreements worldwide. Furthermore, Trump has indicated that new tariffs on agricultural goods will take effect next month, although specific products impacted have yet to be disclosed.
Argentina’s agro-industrial exports to the U.S. reach around $2 billion annually and are diverse, with significant contributions from products like citrus fruits. The ongoing trade disputes threaten to further complicate Argentina’s already restrained economic growth outlook, exacerbating challenges in a fragile economy.
In summary, President Trump’s recent trade policy shifts, including a temporary rollback of tariffs on Canada and Mexico, aim to mitigate market pressures. However, the decision to maintain tariffs on steel and aluminum will have significant repercussions for Argentina, impacting trade relations and economic growth. The possibilities of a free-trade agreement remain uncertain, with challenges posed by regional trade bloc commitments and ongoing economic conditions.
Original Source: www.batimes.com.ar
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