Donald Trump is set to engage in last-ditch discussions with Canadian Prime Minister Justin Trudeau later today as both Canada and Mexico prepare for impending tariffs that could trigger a recession.
The US president mentioned that he had already spoken with Trudeau and planned another call at 8 pm UK time.
On his Truth Social platform, Trump questioned, “Canada doesn’t even allow US banks to open or do business there. What’s that all about?” He went on to highlight issues beyond trade, referring to the drug crisis: “Many such things, but it’s also a drug war, and hundreds of thousands of people have died in the US from drugs pouring through the borders of Mexico and Canada.”
Global stock markets—across Britain, Europe, and Wall Street—experienced sharp declines following Trump’s announcement of new tariffs: 25% on goods from Mexico and Canada, a reduced 10% on Canadian oil, and an extra 10% on Chinese products.
JP Morgan has warned that these tariffs could push both Mexico and Canada into a recession, while Morgan Stanley has labeled a recession in Mexico as its “base case.”
A White House spokesperson noted today that while Mexico appears to be taking the executive order seriously, Canada seems to have misconstrued it as the start of a trade war with its neighbors.
Kevin Hassett, Director of the White House’s National Economic Council, told CNBC, “The good news is that in our conversations over the weekend, we’ve observed that Mexicans are very, very serious about following President Trump’s directives. On the other hand, Canadians appear to have misinterpreted the plain language of the executive order as a declaration of a trade war.”
In a related development, Ontario has terminated its agreement with Elon Musk’s Starlink following Trump’s tariff announcement on Canadian goods. Ontario Premier Doug Ford stated that the province “won’t do business with people hellbent on destroying our economy” and announced that US companies would be barred from winning contracts in Ontario until the tariffs are removed.
