Will Trump-initiated Tariff Bomb Explode from February... Canada and Mexico on 'Emergency' Alert

U.S. President Donald Trump's declared threat of a 'tariff bomb' against Mexico and Canada is showing signs of being put into action.

AFP Yonhap News

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The Wall Street Journal (WSJ) reported on the 26th (local time) that there is growing momentum among President Trump's aides to impose a 25% tariff on Mexico and Canada starting this weekend, February 1.

Just as the Colombian government, which refused to accept illegal immigrants, surrendered and accepted U.S. demands within nine hours after being hit with a 25% tariff bomb, tariffs could be imposed on Mexico and Canada ahead of negotiations.

In particular, Howard Lutnick, the nominee for Secretary of Commerce known for his strong protectionist stance, and Stephen Miller, Deputy Assistant to the President for Policy at the White House, are reportedly in favor of imposing tariffs before negotiations.

This development contrasts with Wall Street's expectation that President Trump's tariff bomb remarks were merely for negotiation purposes with Mexico and Canada and unlikely to materialize.

An administration official said, "President Trump is seriously considering imposing tariffs on Mexico and Canada," adding, "He expects cooperation from Mexico and Canada." While the threat to impose tariffs on the two countries is a statement with negotiations in mind, it also suggests that tariffs could be imposed first, followed by negotiations.

President Trump is demanding that the two countries strengthen their borders to prevent the influx of drugs such as fentanyl and illegal immigrants. He also believes that revisions to the United States-Mexico-Canada Agreement (USMCA) are necessary to promote U.S. manufacturing.

In response, Canadian Prime Minister Justin Trudeau visited Trump's Mar-a-Lago estate in Florida and promised to strengthen border security as well as drug enforcement, attempting to resolve the issues.

However, Canada has also shown signs of opposing President Trump's threats by considering retaliatory tariffs on U.S. imports, signaling a willingness to engage in a trade war with the U.S. Nonetheless, President Trump appears largely unconcerned about Canada's countermeasures.

President Trump stated the day before, "The U.S. does not need Canadian cars or lumber, nor food," adding, "The same products are produced in the U.S." In fact, if a trade war breaks out between the U.S. and Canada, Canada is expected to suffer greater damage. Canada's exports to the U.S. in 2023 amounted to 592.7 billion Canadian dollars (approximately 605 trillion Korean won), accounting for more than three-quarters of its total exports.

Although there are warnings that imposing tariffs on Canadian imports could affect U.S. prices, President Trump's camp maintains that tariff imposition will increase U.S. revenues and help revive domestic manufacturing.

The Mexican government is also on high alert. Mexican President Claudia Sheinbaum has expressed a willingness to actively communicate with the U.S. regarding issues of illegal immigration and drug inflow.

Additionally, Mexico has halted large-scale investment projects by Chinese companies and announced plans to replace Chinese imports. These decisions appear to be made with the Trump administration in mind.

However, experts have pointed out that if President Trump's tariff threats materialize, it could cause disruption across the entire automotive manufacturing industry in the North American region. The current free trade production system, in which various parts cross borders multiple times before a vehicle is completed, could itself be threatened.

Chris Desmond, head of trade at PricewaterhouseCoopers (PwC), said, "It is unclear whether tariffs would be imposed every time goods cross the border. From the perspective of multinational companies, this is a very concerning situation."

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