Dollar Spikes After Trump Reiterates Threat To Tariff Canada, Mexico Over Fenatnyl

Source: Zerohedge | VIEW ORIGINAL POST ==>

President Donald Trump on Thursday announced he will decide tonight on whether to impose sweeping 25% tariffs on Canada and Mexico related to their failure to regulate the flow of fentanyl into the United States, and said his administration is in the process of formulating tariffs for China as well.

We’ll be announcing the tariffs on Canada and Mexico for a number of reasons,” said Trump, adding “Number one is the people that have poured into our country so horribly and so much. Number two are the drugs fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits.”

Trump added that the tariff levels “may or may not rise with time,” Bloomberg reports.

Trump reiterated the pledge while speaking with reporters Thursday in the Oval Office as he signed executive actions related to Wednesday’s deadly airplane collision.

Trump had threatened to levy those tariffs if the nations did not do more to help secure US borders from the inflow of undocumented migrants and illegal drugs. Markets, business and political leaders had been watching closely to see if Trump would follow through on a tariff threat. –Bloomberg

The president added that he would decide as soon as tonight on whether the tariffs would apply to Canadian oil imports

“We don’t need the products that they have. We have all the oil that you need. We have all the trees you need,” said Trump, referring to major imports from Canada.

West Texas Intermediate oil futures climbed above $73 a barrel following the comments. The dollar rose to a daily high and Canadian loonie slumped.

Trump’s move was closely anticipated by markets as well as global business and political leaders who have scrutinized his words and actions for any indication on whether the US president would deliver on his levy threats or use them as the starting point for negotiations on trade.

Tariffs against the two countries, who are major trading partners and export markets for the US, threaten to have dramatic economic consequences and potentially launch a trade war by undermining protections from the US-Mexico-Canada free trade agreement.

White House Press Secretary Karoline Leavitt says they’re coming Feb. 1.

The news sent both the Mexican Peso, Canadian Dollar and Yuan in all sorts of directions, while the US Dollar spiked in response.

*OFFSHORE YUAN DROPS 0.4% TO SESSION LOW ON TRUMP TARIFF REMARKS

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