Last week, President Donald Trump imposed 10% tariffs on China after reaching last-minute agreements with Canada and Mexico to delay tariffs by 30 days. China responded by slapping tariffs of 15% on US coal, gas, and other goods.
Nearly half of all US imports, which amount to more than $1.3tn, come from Canada, China, and Mexico. However, analysis by Bloomberg Economics shows that the new tariffs could reduce overall US imports by 15%.
Specific sectors of the US economy will be hit particularly hard, including the automotive, energy, and food industries. Tariffs will hit Canada and Mexico much harder, as trade makes up about 70% of both economies’ Gross Domestic Product (GDP).
The two countries are particularly dependent on trade with the United States. More than 80% of Mexico’s exports—including cars, machinery, fruits, vegetables, and medical equipment—head north, accounting for 15% of total US imports.
A unilateral 25% tariff on these goods could slash Mexico’s GDP by some 16%, the Bloomberg report noted, with Mexico’s auto industry bearing the brunt.
Canada faces a similar challenge. The United States buys more than 70% of Canada’s exports, with these goods making up 14% of total US imports. Under the new tariffs, Canada’s energy sector will take the biggest hit, as exporters send 80% of their oil south.
China is comparatively less dependent on the United States and less reliant on trade overall. China has instead ramped up trade with other partners, including the European Union, Mexico, and Vietnam.
