President-Elect Trump Continues With His Tariff Agenda

In and amongst picking cabinet nominees like  Brooke Rollins for Secretary of Agriculture, President-elect Donald Trump continues to pressure major U.S. trading partners with the prospect of tariffs.

Recently, he threatened a 25 percent tariff on Canadian and Mexican imports if officials in those countries didn’t stop the flow of undocumented workers and block the movement of illegal drugs like fentanyl. 

That position may have yielded some results. 

While Mexican President Claudia Sheinbaum initially rebuffed the threat, there was a raid over the weekend that stopped more than a ton of fentanyl pills from coming into the U.S. - the largest catch of the synthetic opioid in Mexico’s history.

Last week, Canadian Prime Minister Justin Trudeau met with Trump at Mar-a-Lago. Trudeau said he had an “excellent conversation” but it was unclear whether that conversation alleviated the president-elect’s concerns.

Trump has also threatened the nine nation BRICS trading group with 100 percent tariffs on their goods if the nine-nation trading bloc undermines the U.S. dollar. In a Truth Social post, Trump said if they replace what he called the mighty U.S. Dollar they should expect to say goodbye to selling into the wonderful U.S. Economy. 

According to the International Monetary Fund, the dollar represents roughly 58 percent of the world’s foreign exchange reserves, and major commodities like oil and soybeans are still primarily bought and sold using U.S. dollars. 

Agricultural industry lobbying groups like the National Farmers Union have renewed their call for Trump to be careful in taking what they call drastic trade measures against China. The NFU is concerned that a renewed tariff war could jeopardize the financial health of family farmers who “suffered significant losses” in the last tariff war. 

Last month, the National Corn Growers Association and the American Soybean Association warned against reigniting a tariff war with China. The conclusion of a study funded by both groups revealed that exports could be diverted to other nations but there was not enough demand from the rest of the world to offset the major loss of soybean exports to the Middle Kingdom. 

The Biden Administration kept many of the tariffs in place that were launched by Trump during his first term.

Late last week, China’s Ministry of Commerce said escalating trade controls on Chinese companies will harm economic relations between China and the United States. This week, Chinese officials banned the export of rare minerals to the U.S. that are used to make weapons and semi conductors in what may be a preview of things to come if Trump puts new tariffs in place.

For Market to Market, I’m David Miller.