Donald Trump's new tariffs on imports from Canada, Mexico, and China could lead to a 22 per cent decline in US exports, according to the calculations by the ifo Institute. Canada and Mexico would be hit hardest, with total export declines of 28 per cent and 35 per cent, respectively, if countermeasures are imposed. China, in contrast, would see only a 3.8 per cent drop.

The tariffs, which include 25 per cent duties on most Canadian and Mexican products (which are now temporarily halted for a 30-day period), except a 10 per cent rate on Canadian energy-related goods, and 10 per cent on Chinese imports, would also have a severe impact on industrial value added. Canada and Mexico would see declines of 14 per cent and 13 per cent, respectively, while China's reduction would be less than 1 per cent.

Without countermeasures, the export declines would be slightly lower, with Canada facing a 17 per cent drop, Mexico 21 per cent, and the US itself experiencing a 14 per cent decline. Germany, however, is expected to see a marginal boost in exports, rising by 0.5 per cent with countermeasures and 0.2 per cent without them, as per ifo.

“While China can more easily redirect trade away from the United States, Canada and Mexico have significantly closer ties with the United States due to their geographical location,” says Lisandra Flach, director of the ifo Center for International Economics.

“The effect on German exports is double-edged: On the one hand, the US tariffs would reduce demand from the Canadian and Mexican economies for German goods. On the other, German exports to the United States would displace Canadian, Mexican, or Chinese exports. However, due to Trump’s threats to also impose tariffs on US imports from the EU in the near future, the chances of such a growth in exports appear to be very slim,” says Flach.

Fibre2Fashion News Desk (HU)