U.S. President Donald Trump's imposition of tariffs on imports from Canada, China, and Mexico, the United States' three largest trading partners, has jolted the global economy. While most of these levies were ultimately delayed after frantic negotiations, Trump's actions confirmed his campaign rhetoric: tariffs, whether implemented or threatened, will be central to his foreign policy.
The moves sparked outcry from industry leaders and economists, who cited the risks of crippled supply chains and higher prices for American consumers and companies. The tariffs represent a clear and significant risk to Fitch's macroeconomic forecasts for the three countries, with the US tariffs' overall increase resulting in $350 billion more in import taxes, potentially leading to a 0.4% decline from Fitch's estimates in 2026 GDP and a hike in inflation.
The impact on the Mexican and Canadian economies would be far bigger, reflecting the high share of exports to the US relative to GDP. The decline in GDP from Fitch's estimates would be 2.3% and 1.4% for the two countries, respectively.
Trump signed an executive order imposing tariffs on imports from Mexico, Canada, and China on Saturday. Although the US paused the implementation of the tariffs on goods from Canada and Mexico for 30 days on Monday, the 10% tariffs on Chinese goods seem to be implemented as scheduled. China has responded by imposing tariffs of 15% on some American products.