A commercial war .. How does American customs duties affect the world’s economy?

Donald Trump continues to insist on imposing customs duties on countries, as the customs duties imposed by Trump on Saturday on the Warda of three of the most prominent US trading partners are unprecedented in the modern era.
This would lead to the outbreak of a commercial war that reflects repercussions on all concerned.

American customs duties

The United States is an important commercial partner for the three targeted countries: but the influence will be incapacitated on the neighbors of the United States, compared to China, the second largest economic power in the world.
According to the Ministry of Commerce, the total value of American imports, from Canada, Mexico and China, was more than $ 1.2 trillion in the first 11 months of 2024, just more than 40 percent of all American imports.
Regarding Mexico and Canada, the United States is the largest customer by a big difference, as it imports 77 percent of Mexican exporting products and 84 percent of that Canadian, according to the two statistics agencies in the two countries.

China’s dependence on the American market

As for China’s dependence on the American market, it is much smaller, as it represents only 15 percent of the exports of 2024, according to Chinese customs data.
The trade deficit between the United States and the three countries was large in the first 11 months of 2024, with more than 270 billion dollars with China, $ 157 billion with Mexico and $ 55 billion with Canada.
Due to its exposure to US trade, it is expected that Mexico will be the most affected, and according to “Oxford Economics”, the fees imposed on Saturday can raise the inflation rate there to six percent annually.

Mexico is the most affected

This comes compared to 4.2 percent in December, while the country’s national currency, bizo, can decline by 7% with stagnation risks.
For Canada, excluding the repercussions of the recently announced fees, American customs fees can lead to a decrease of 2.7% in the gross domestic product this year and 4.3% next year.
This comes compared to the expected levels without fees, according to Ernst’s chief economist, “Ernst and Young” Gregory Daco, exacerbating inflationary pressures.

Impact on the American economy

As for the American economy, the clearer impact on prices may be, and a very wide range of goods, ranging from cars and avocado imported from Mexico through poultry and oil from Canada, to the iPhone phones from China, and so on.
At a time when additional taxes of 10 to 25 percent will face these products, it is expected that consumers will suffer even part of these additional costs.
And Friday, the “Tax Corporation”, a research center that supports overall taxes, estimated that the new fees reduce 0.4 percent of US internal product by a long term and add annual costs of $ 830 to every American home this year.
Ernst and Young expect inflation that the inflation will rise by 0.7 percent in the first chapter before the effects begin to decline.

The response of the targeted countries with customs fees

The three countries were quick to respond to Trump’s announcement of the imposition of fees, and Canada was the first country to respond as it announced a fee of 25 percent on US products worth $ 155 billion Canadian dollars (106.6 billion dollars), and fees will be applied as of Tuesday.
Some Canadian provinces take additional steps, and he requested the Prime Minister of Ontario and British Colombia from the bodies that import some drinks in the two provinces to stop their purchases from the states governed by Republicans, but all the American states for Ontario.
As for China, its Ministry of Commerce announced that Beijing will take “counter -measures parallel to protect our rights and our interests in a firm manner,” and the Chinese Foreign Ministry stated that “no one will win in any commercial war or customs duties war.”
Beijing and Washington states that they had submitted complaints about the conflict to the World Trade Organization, and in a strongly worded statement, Mexican President Claudia Xinbom announced a reprisal customs duties that will be imposed on American products, without providing details.