Trump and Tariffs: US’s Greatness or Global Economic Crises? (2-5)

America/Canada and Mexico
Dr. Abdo Dawood
Before moving on to the second part of the relationship between the United States and its neighbours, Canada and Mexico, and the impact of tariffs on them, we would like to thank the readers who reached out to us—whether to encourage our writing or to correct the typographical error that confused the US public debt with the budget deficit. For clarification, the US budget deficit is estimated at about 4% of GDP, while the public debt stands at approximately $33 trillion, according to the latest data.
Returning to today’s topic, we note that the economic and political relations between the United States and Canada have remained stable, with no significant historical tensions. The two countries share the longest undefended international border and are bound by strong trade agreements, such as the North American Free Trade Agreement (NAFTA), which was updated to the United States-Mexico-Canada Agreement (USMCA) in 2020.
Politically, the two nations remain close allies, cooperating in defence and security, including through the North American Aerospace Defense Command (NORAD).
As for relations between the United States and Mexico, they are among the most complex in the world. Mexico is the third-largest trading partner of the US, with billions of dollars exchanged annually in sectors like agriculture and the automotive industry. The free trade agreement (NAFTA), updated to (USMCA), has strengthened trade cooperation between the two countries. However, political challenges persist, such as illegal immigration and organized crime. The border wall between the two nations—comprising physical barriers and surveillance technology—reflects these challenges. During Trump’s first term, about 930 kilometres of the wall were built, while the total border between the two countries spans approximately 3,145 kilometres.
The relationship between the US, Canada, and Mexico is marked by economic and political interdependence, yet it differs in nature. While the relationship with Canada is characterized by cooperation and stability, the one with Mexico is more complex, encompassing trade cooperation under (USMCA) but also facing challenges like illegal immigration and organized crime.
During his recent election campaign, Trump proposed annexing Canada as the 51st US state and imposing tariffs on it. It appears the annexation idea was merely a negotiating tactic, while the real goal was achieving full economic dependency on the US. As for Mexico, the main campaign objectives were stopping illegal immigration and combating drug trafficking. Trump may have wanted to signal to the world that this is America’s approach to its neighbours.
Looking at the trade balance, Canada’s exports to the US in 2024 amounted to about 482billion, while Canadaimportednearly482billion whileCanadaimportednearly441 billion, indicating a trade deficit of around 41billion—lessthan1041billion—lessthan10323.1 billion, while imports reached $475.6 billion, resulting in a deficit of nearly 30%. This deficit alone does not justify such uproar, but Trump seemed intent on using the economy to serve political goals.

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