Instant Reaction: Trump Tariffs Hit Mexico, Canada and China
10:56 Share

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news right now. Listen at schwab.com slash washingtonwise.

This is Breaking News from Bloomberg.

We are seeing a sharp sell-off in stocks around the world, with President Trump set to follow through on his threat of tariffs against America's closest trading partners. On Saturday, the president announced 25% duties on products from Canada and Mexico and 10% on China, starting just after midnight tonight. Trump admits American consumers might take a hit. Short term, a little pain, and people understand that. But long term, the United States has been ripped off

by virtually every country in the world. We have deficits with almost every country, not every country, but almost. And Republican lawmakers are signaling they support the president's efforts. Senator Lindsey Graham had this reaction on Fox News Sunday. If you want tariffs to go away, Mexico and China, stop poisoning Americans. Stop sending fentanyl into America to kill Americans. If you want to have a better relationship, Mexico with the United States, do your part on the other side of the border.

But Democratic Senator Mark Warner says tariffs amount to what he calls a Donald Trump Super Bowl tax less than a week before the big game. Remember Donald Trump got hired trying to lower, saying he was going to lower grocery prices. Right. Two weeks in, he's doing something that's going to do the absolute opposite. Senator Warner spoke to CBS's Margaret Brennan on Face the Nation, and you can hear both Face the Nation and Fox News Sunday every Sunday on Bloomberg Radio.

Well, Nathan, Trump says he will have separate calls this morning with Canadian Prime Minister Justin Trudeau, as well as with the Mexican leadership. The Canadian leader has already pledged 25 percent retaliatory tariffs on $107 billion worth of U.S. goods. Trudeau says Trump's action now risks job losses and price rises for Americans.

If President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us. Canadian Prime Minister Justin Trudeau. Other Canadian officials announced their own measures. David Eby, the premier of British Columbia, directed a provincially owned liquor distributor to remove some alcohol brands made in Republican-led states from the shelves of retail stores.

and to cease further purchases. Well, as you mentioned, Karen, the peso is dropping to its lowest level in almost three years. Mexican President Claudia Sheinbaum says she'll set out her response to U.S. tariffs later today. She says she hopes a resolution can be found quickly. Sovereignty is not negotiable. To this end, yesterday in my statement, I proposed to President Trump that we establish a working group. It is not with the imposition of tariffs that the problems are resolved.

but speaking and dialoguing as we did. Mexican President Claudia Sheinbaum spoke there through an interpreter. President Trump has said he may escalate U.S. tariffs further in response to any retaliations.

Well, Nathan, China's reaction to Trump's tariffs, which come in the middle of Lunar New Year holiday celebrations, has been more muted. The country's Commerce Ministry issued a statement expressing strong dissatisfaction and vowing corresponding countermeasures without elaborating. Our chief North Asia correspondent, Stephen Engels, says China's reaction could yet ramp up. This is going to be a protracted process. So Beijing has to process exactly what's going to be the end result.

a result of tariffs? Is it going to go up to 60 percent? It's 10 percent right now. And there's going to be an economic impact of that. And I think right now, especially as they're coming out of the long Lunar New Year holiday, kind of crafting their message, obviously.

And that's Bloomberg's Stephen Angle reporting from Hong Kong. And after he announced those duties on China, Mexico and Canada, Karen, President Trump also ramped up threats to the European Union, citing that bloc's large surplus with the U.S. It will definitely happen with the European Union. I can tell you that.

because they've really taken advantage of us. And, you know, we have over a $300 billion deficit. They don't take our cars. They don't take our farm products. They take almost nothing. And we take everything from them, millions of cars,

Tremendous amounts of food and farm products. President Trump's remarks came after an EU spokesperson said the bloc would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods. Well, Nathan, President Trump's tariffs against Canada and Mexico may result in consumers paying more for cars. And we get that angle of the tariff story with Bloomberg's John Tucker and John Smyth.

How much are we talking about here? Well, Karen, research from automotive consultant Alex Partners says the tariffs will add $60 billion in cost to the auto industry, a lot of which likely to be passed on to consumers. Wolf Research Analysts have said the average price of a new car may climb by about $3,000.

The duties would immediately hit almost a quarter of the 16 million vehicles that are sold in the U.S. every year, as well as the parts and components that go into them. Now, car components can make their way back and forth across U.S. borders as many as eight times during the production of a car. Automakers in Mexico, they've been preparing by preemptively importing both more components and vehicles that

could ease the blow in the first few weeks. But Flavio Volpi, he's the president of Canada's Automotive Parts Manufacturers Association, predicts, his words now, the auto sector is going to shut down within a week. This morning, shares of GM down 7%, Stellantis is off almost 6%, and Ford is down 4%. John Tucker, Bloomberg Radio.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. President Donald Trump's promise of tariffs on America's closest trading partners is rippling through markets. After announcing 25% duties on Canada and Mexico and 10% on China, the president says the European Union is next.

They don't take our cars. They don't take our farm products. They take almost nothing. And we take everything from them. President spoke to reporters outside Washington last night. Joining us this morning from the nation's capital, Terry Haynes, the founder of Pangea Policy. As we watch stocks sell off and the dollar rally this morning, Terry, should the market have seen this coming? Good morning.

Hi, good morning, Nathan. And yes, I think they should have. Markets have spent the last few months talking themselves into a gradualist or even, you know, this isn't happening, it's all negotiation stance. And yes, it is negotiation, but it's negotiation based not from a trade war perspective, but I think from an overall conflict perspective, a broader geopolitical context, among others.

So what is the chance then, Terry, that the president actually does follow through on these? He announced they're going to kick in just after midnight tonight. At the same time, he's saying that he will have discussions with Canada and Mexico today. I think the market should assume that some tariffs are coming. I think the size and shape are still very much up in the air, and markets are going to have to get used to volatility here, frankly, in the realm of political decision-making. But

My instinct, and it is only instinct, is that it's not at all beyond the question that the tariffs go in as announced. It's also not beyond the question that they go in with some lowered modifications. One way you can look at this is Trump testing the markets on reaction, and he's also testing politically the reaction of our border partners, China,

to do specific things to actually improve the border and stop the flow of fentanyl. Is this a test on fellow Republicans as well? It is to some extent, yes. But I think it's, and so far they've been supportive. But what you've got to remember over the last decade, and it's been a decade since tariff policy became part of geopolitical policy in the United States, is that Congress has supported the means in which the how,

uh... terror of the trump imposes these tariffs whether it was trump one whether it was biden when then now whether it's trump to uh... deal congress supports the how there will be some descent on the the when or why that's rooted as much in the but partisan politics is anything else but there's not going to be any serious uh... move to try to stop from from doing any of these things

Do you think there are any further concessions that Canada or Mexico could make after the concessions that they've said that they have made even before the president announced these duties over the weekend?

My unsolicited advice to those countries is very simple, is that you get as specific, if they want to stop the tariffs, you get as specific and talk about how well and how much you can partner as possible. Trump realizes, I think, unlike the first, that he's going to need support from his border partners and very much wants those things.

And in just 30 seconds, is this about partnerships? Is this about the fentanyl and immigration flows? Or is this more about the trade deficits?

I think it's about both, but at root, Trump always says that his top priority is securing the border, and I think you have to take the border strategy both seriously and literally as part of the broader geopolitical strategy and the broader economic strategy, which are out there, which exist, even if they're being ignored by markets today.

This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

Join Bloomberg in Chicago or via live stream on March 11th for the Future Investor, Finding the Opportunities. This 2025 event series will examine how companies are investing in their businesses to create efficiencies, innovating their products and services, and improving the customer experience.

This series is proudly sponsored by Invesco QQQ. Register at BloombergLive.com slash Future Investor Chicago. That's BloombergLive.com slash Future Investor Chicago.