It should be noted that the president of USA ordered Saturday duty 25% to Mexican imports Already most of the Canadians and 10% to goods from Chinawhich implies, according to analysts, the beginning of a commercial war that could reduce global growth and cause a rebound in inflation.
If 25% tariffs are maintained, JP Morgan predicted that Mexico and Canada would face an economic recessionwhile Morgan Stanley and Societe Generaloe foresees a similar result for Mexico.
Tariffs: The strong blow to the economies of Mexico and Canada
“A recession in Mexico becomes the base case”economists said Morgan Stanley In a note dated February 2. What happens is that Mexico and Canada are the two main commercial partners of the United States.
His first response was that they immediately promised retaliation tariffs, while China said it would challenge Trump’s taxes in the World Trade Organizationas would take other “countermeasures.”
“The size of a sustained tariff increase of 25% will be large enough to launch Mexican and Canadian economies to the recessionand this result will be our inclination if these policies are maintained for six months, “said JPM economists.
About 77% of Canadian exports, which account for 24% of the country’s GDP, are directed to the United Stateswhile equivalent figures for Mexico are more than 80% of exports -o a quarter of its economy-, according to Morgan Stanley’s estimates.
Morgan Stanley provides that prolonged tariffs of 25%, with reciprocal tariffs by Canada, They would subtract between 2.3 and 2.8 percentage points to the growth of the Canadian GDP.
As for currencies, the Canadian dollar could fall to 1.50 units per US dollar, while the Mexican weight could be depreciated about 10%, according to Morgan Stanley estimates.
Separately, Citigroup said that “The magnitude of the impact on Mexico’s economy will depend on the persistence of the tariff, The reaction of the currency (which could mitigate the effect) and the uncertainty for the future of commercial policy between the United States and Mexico, which could limit investment perspectives. “
The GDP of the Latin American country would contain 0.7% in a context of persistence of tariffs and a 10% weight depreciation, according to Citi’s forecast.
Source: Ambito

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