popular articles

Trump’s Proposed 25% Tariffs Could Disrupt North American Trade

Donald Trump's proposal to impose a 25% tariff on all imports from Canada and Mexico risks disrupting supply chains and increasing costs for American businesses and consumers.

Please share:

Donald Trump’s proposal to impose 25% tariffs on all imports from Canada and Mexico could disrupt the economic balance of North America. These two countries, which account for nearly 30% of U.S. imports, provide essential goods such as automotive parts, hydrocarbons, metals, and lumber.

The economic consequences of this policy will be felt on multiple levels. Experts note that manufacturing industries heavily reliant on raw materials from these neighboring countries could see their costs surge. “The automotive sector has spent decades building a supply chain infrastructure across North America,” explains John Lash, vice president at e2open. “These materials sometimes cross borders multiple times before being assembled.”

Increased Risk for Businesses

Companies facing these tariffs will have to choose between absorbing costs or passing them on to consumers. Rodney Lake, director of the GW Investment Institute, highlights that slim profit margins make absorbing such costs unsustainable: “A 25% tax on already low-margin products is untenable for many economic players.”

Consumers, already impacted by persistent inflation, will likely see price increases for durable goods, furniture, and vehicles. The latest consumer price index rose 2.7% in November, underscoring ongoing inflationary pressure.

Impact on Trade Agreements

Such a measure could violate the United States-Mexico-Canada Agreement (USMCA), in force since 2020. However, Trump could invoke emergency national laws to bypass these agreements. Richard Mojica, a trade specialist at Miller & Chevalier, explains that national security or immigration concerns could justify these tariffs: “This threat could also serve as leverage to renegotiate certain USMCA provisions.”

The agreement is scheduled for review in 2026, with expiration set for 2036. Observers suggest that discussions may be accelerated if tariffs are used as a negotiation tool.

Resilient Consumers, But for How Long?

Despite rising prices since 2020, U.S. consumers have remained resilient. Retail and food services sales increased by 0.4% in October, exceeding analysts’ forecasts. This resilience may give a Trump administration additional justification to pursue this tariff strategy. “Consumers have shown their ability to absorb temporary price increases,” notes Lake. “The goal would be to endure short-term sacrifices to promote the reshoring of supply chains.”

However, the cumulative effect of cost increases on businesses and consumers could quickly reach its limits. Inflationary pressures and financial market tensions will add further economic uncertainty.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Renewable energies accounted for 33.9% of electricity consumption in France in 2024

In 2024, renewable energies covered 33.9% of electricity consumption in metropolitan France, driven by increased hydropower output and solar capacity expansion.
The French Energy Regulatory Commission (CRE) has announced its strategic guidelines for 2030, focusing on the energy transition, European competitiveness and consumer needs.
The French Energy Regulatory Commission (CRE) has announced its strategic guidelines for 2030, focusing on the energy transition, European competitiveness and consumer needs.
Madrid paid an arbitration award to Blasket Renewable Investments after more than ten years of litigation related to the withdrawal of tax advantages for renewable energy investors.
Madrid paid an arbitration award to Blasket Renewable Investments after more than ten years of litigation related to the withdrawal of tax advantages for renewable energy investors.
The global renewable energy market continues to grow, reaching $1,200 billion in 2024, according to a report by the International Energy Agency (IEA), supported by investments in solar and wind energy.
The global renewable energy market continues to grow, reaching $1,200 billion in 2024, according to a report by the International Energy Agency (IEA), supported by investments in solar and wind energy.

Saint-Jean-Baptiste Cooperative secures $3.43mn to modernise electrical grid

The Québec government is granting $3.43mn to the Saint-Jean-Baptiste Electric Cooperative to deploy smart meters and upgrade infrastructure across 16 municipalities.
New US tariff measures are driving up energy sector costs, with a particularly strong impact on storage and solar, according to a study by Wood Mackenzie.
New US tariff measures are driving up energy sector costs, with a particularly strong impact on storage and solar, according to a study by Wood Mackenzie.
Despite the proclaimed urgency, European climate investments stagnate around €500 billion per year, far from the estimated needs of nearly €850 billion. New financial instruments are attempting to revive an indispensable momentum.
Despite the proclaimed urgency, European climate investments stagnate around €500 billion per year, far from the estimated needs of nearly €850 billion. New financial instruments are attempting to revive an indispensable momentum.
African countries now spend more on debt service than on education and healthcare, limiting essential investments despite significant energy potential. The G20, under pressure, struggles to provide an adequate response to the financial and climate challenges.
African countries now spend more on debt service than on education and healthcare, limiting essential investments despite significant energy potential. The G20, under pressure, struggles to provide an adequate response to the financial and climate challenges.

Egypt authorises four private producers to supply 400 MW of electricity to industrial clients

Four renewable energy producers have been authorised to sell 400 MW directly to Egyptian industrial companies without public support.
A report by Ember shows ASEAN could supply nearly one-third of its data centres with wind and solar power by 2030 without storage, provided appropriate public policies are implemented.
A report by Ember shows ASEAN could supply nearly one-third of its data centres with wind and solar power by 2030 without storage, provided appropriate public policies are implemented.
Spanish authorities and grid operator REE denied conducting any experiment on the national electricity network prior to the massive outage on April 28, the cause of which remains unknown.
Spanish authorities and grid operator REE denied conducting any experiment on the national electricity network prior to the massive outage on April 28, the cause of which remains unknown.
Three trade trajectories projected by Wood Mackenzie show how tariff tensions could shift demand, prices and investment in the global energy sector.
Three trade trajectories projected by Wood Mackenzie show how tariff tensions could shift demand, prices and investment in the global energy sector.

The European Union moves closer to 2030 energy targets, says Brussels

The European Commission states the Union is on track to cut emissions by 54% by 2030, following updated national plans.
South Korea announces two major tenders totaling 2.25 GW, split between offshore wind and solar, introducing new economic and technical criteria designed to strengthen energy security and attract international investors.
South Korea announces two major tenders totaling 2.25 GW, split between offshore wind and solar, introducing new economic and technical criteria designed to strengthen energy security and attract international investors.
Ember anticipates that a third of ASEAN data centre electricity demand could be met by wind and solar by 2030, without batteries, if appropriate political measures are implemented.
Ember anticipates that a third of ASEAN data centre electricity demand could be met by wind and solar by 2030, without batteries, if appropriate political measures are implemented.
A Rocky Mountain Institute report reveals India’s energy ambition, with electricity demand potentially tripling by 2050, backed by an industrial policy focused on renewable energy.
A Rocky Mountain Institute report reveals India’s energy ambition, with electricity demand potentially tripling by 2050, backed by an industrial policy focused on renewable energy.

Indonesia plans 69.5 GW of new power capacity by 2034

The Indonesian government targets a mixed energy expansion involving coal, gas, renewables, and nuclear, requiring IDR2,967.4tn ($235bn) in investment by the end of 2034.
Canadian Natural Resources Minister Tim Hodgson announces reforms to the energy permitting process, aiming to stimulate investments and strengthen relations between the government and industry.
Canadian Natural Resources Minister Tim Hodgson announces reforms to the energy permitting process, aiming to stimulate investments and strengthen relations between the government and industry.
The U.S. Environmental Protection Agency is finalising a proposal to lift emissions caps for thermal power plants, amid a broader shift toward national energy security.
The U.S. Environmental Protection Agency is finalising a proposal to lift emissions caps for thermal power plants, amid a broader shift toward national energy security.
The Pakistani government is releasing 2,000 megawatts of power to support the development of data centres focused on artificial intelligence and Bitcoin mining, as part of a strategy to attract foreign investment.
The Pakistani government is releasing 2,000 megawatts of power to support the development of data centres focused on artificial intelligence and Bitcoin mining, as part of a strategy to attract foreign investment.

Belgium legalises extension of two nuclear reactors until 2045

Belgium’s federal parliament has adopted a law authorising the extension of Doel-4 and Tihange-3 reactors and allowing new nuclear construction, ending the nuclear phase-out policy established in 2003.
The re-elected Australian government is investing heavily in storage, critical minerals and domestic production to meet its target of 82% renewable electricity by 2030.
The re-elected Australian government is investing heavily in storage, critical minerals and domestic production to meet its target of 82% renewable electricity by 2030.
The US House budget bill outlines a gradual phaseout of tax credits, affecting financing for solar, wind, storage, and clean hydrogen initiatives.
The US House budget bill outlines a gradual phaseout of tax credits, affecting financing for solar, wind, storage, and clean hydrogen initiatives.
China's gas, oil and coal volumes remain above last year’s levels, despite a decline in April compared to the record highs of March.
China's gas, oil and coal volumes remain above last year’s levels, despite a decline in April compared to the record highs of March.

Advertising