On the day of February 2, 2025, events took place

TROUBLE ON THE HORIZON? U.S. TARIFFS AND THEIR CONSEQUENCES

Washington/New York—Donald Trump's tariffs on Canadian, Mexican, and Chinese imports may ignite a trade war with unforeseen repercussions and a spiral of inflation as the United States recovers from a string of price hikes.

Trump admitted that the newly-imposed tariffs on Canadian, Mexican, and Chinese goods would bring hardship to the U.S., but justified them, stating that such measures are "worth the price to pay."
Claudia Sheinbaum, Mexican President, called an emergency meeting of her cabinet on Sunday to hammer out a strategy against the 25% tariffs on Mexican goods imposed by Trump.
In response, Canada imposes 25% tariffs on certain U.S. products effective Tuesday, primarily targeting states and economic sectors close to Trump.
China promises retaliation against the 10% tariffs imposed by the U.S. on fentanyl, stressing that the tariffs "will undermine future cooperation in drug control."

STOPPING THE TIDE—PANAMA AND THE U.S. PRESIDENT

Panama City—Panamanian President José Raúl Múnera attempted to implement a truce with the U.S. on Sunday during a meeting with U.S. Secretary of State Marco Rubio, as Trump threatens to take control of the Panama Canal in response to alleged Chinese influence in the route.

COLOMBIA AND THE FIGHT AGAINST DRUG TRAFFICKING

Madrid—In the Columbian Chocó jungle, the disarmament of the guerrilla has taken place, but paramilitaries and drug traffickers continue to control territories. Fear pervades the Emberá Dobida indigenous community, where the number of female suicides has surged fivefold in the last four years.

ISRAEL AND THE U.S.—A STRONG ALLIANCE

Jerusalem—Israeli Prime Minister Benjamin Netanyahu sets off for Washington, set to become the first international leader welcomed by Trump at the White House.

A WARY UKRAINE

Kyiv (Ukraine)—Russian advances have slowed in Ukrainian territories over the past month, despite Moscow's troops exerting immense pressure on the battlefront.

BEYONCÉ FOR THE GRAMMY WIN?

Los Angeles—The U.S. Recording Academy unveils the Grammy Awards winners. With confidence, Beyoncé eyes the coveted Album of the Year award.

In recent developments, the U.S. has implemented substantial tariff hikes on goods imported from Canada, Mexico, and China in 2025, triggered by executive actions focusing on trade and border security concerns.

Canada imposes 25% tariffs on $20B (CA$30B) of U.S. goods, with plans to expand to CA$125B, in response to Trump's tariffs. Meanwhile, Canada exempts USMCA-compliant goods, which make up 38-50% of the country's imports, from tariffs.

Mexico faces similar tariffs and excludes USMCA-compliant goods that comprise 49% of its imports from tariffs. However, the country has prepared retaliatory measures.

China imposes 125% tariffs on select goods, with new de minimis rules: 90% ad valorem or $75/item is effective as of May 2, 2025, with the rate increasing to $150/item from June 1. Postal imports are now subject to stricter duty calculations as well.

As a consequence, the U.S. average effective tariff rate increased by 25.6 percentage points to 28%, which is the highest since 1901. After supply chain reshuffling, the effective rate rises by 15.6 percentage points, reaching the highest level since 1934. This can lead to stock declines and sector-specific pressures, mainly in the automotive and retail sectors, among others. The escalation risks further decoupling between the U.S. and China, amplifying supply chain disruptions.

What's next? The timing, policy, and potential retaliation from Canada and Mexico remain uncertain. Supply chain reshuffling could take weeks to years, and longer-term planning is hindered by the lack of a fixed expiration for the exemptions on March 6.

The U.S. has imposed substantial tariffs on goods imported from Canada, Mexico, and China in 2025, triggering concerns about a potential trade war and its repercussions.
In response, Canada imposes 25% tariffs on $20B (CA$30B) of U.S. goods, with plans to expand to CA$125B, exempting USMCA-compliant goods from tariffs that make up 38-50% of its imports.
Mexico faces similar tariffs and excludes USMCA-compliant goods from tariffs, which comprise 49% of its imports. However, the country remains prepared for retaliatory measures.
China imposes 125% tariffs on select goods, with new de minimis rules, potentially leading to stock declines and sector-specific pressures, particularly in the automotive and retail sectors.
The escalation risks further decoupling between the U.S. and China, amplifying supply chain disruptions, as the timing, policy, and potential retaliation from Canada and Mexico remain uncertain.