Predictions that US would remain a source of uncertainty in the global economy—particularly as it continues its heavy useof tariffs to achieve policy goals—have largely paid true over the last month. Trade talks between the US and China havebroken down, with both sides accusing the other of backtracking on key promises. The US continues to push sanctions onVenezuela and associated entities, and has escalated its rhetoric against Iran.The US has also put another hurdle in front of the upcoming ratification of the USMCA, its new NAFTA-replacing freetrade deal. After ceding to calls from Canada and Mexico to remove steel and aluminium tariffs against them, the US thenpivoted sharply and announced a 25% tariff on all Mexican goods, to be implemented in 5% increments until the US issatisfied that Mexico is taking measures to prevent migration across the US’s southern border. It appears likely thatMexico will, as with previous tariffs, refuse to ratify the new deal until these measures are lifted—something that could takesome time.
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