Trump resumed his now daily trade war and tariff tweetstorm, blasting on Twitter that “we have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs.” Specifically, the president added that “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”
Trump also warned Canada that it “must treat our farmers much better. Highly restrictive.”
Finally, Trump also lashed out at Mexico “must do much more on stopping drugs from pouring into the U.S.” perhaps hinting that the US will also impose tariffs on illegal drugs, and adding “they have not done what needs to be done. Millions of people addicted and dying.”
While hardly new, Trump’s tweeting merely underscores that he appears to have made up his mind and that despite pleas and threats from US allies and trading partners, the White House will proceed with a formal tariff announcement some time this week.
In kneejerk response the loonie accelerated its decline, with the USDCAD rising to 1.2930, the highest level since mid-2017; the peso demonstrated a similar reaction at first, but the initial weakness now appears to be fading.