Zinger Key Points
- President-elect Trump vows to impose tariffs on Mexico and Canada to combat illegal immigration and drug trafficking.
- Economic analysts warn that a 25% tariff could disrupt U.S. supply chains and provoke retaliatory measures from trade partners.
Betting activity on Polymarket suggests significant skepticism about President-elect Donald Trump's promise to impose a 25% tariff on goods from Mexico and Canada.
What Happened: As of now, market odds give the tariff's implementation only a 30% chance by the proposed Jan. 31, 2025 deadline, despite Trump's strong rhetoric on the issue.
Trump on Monday announced his intention to implement the tariff as part of his first executive orders after taking office.
In a statement on Truth Social, Trump said, "On January 20th, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States." He justified the measure as a response to the “invasion” of illegal immigrants and drugs, including fentanyl, coming across the U.S. borders with Mexico and Canada.
He added, "This tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"
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Why It Matters: Polymarket bettors remain skeptical about the feasibility of Trump's tariff plan.
While the statement has stirred political and economic debate, only 30% of bettors currently believe that the tariff will be implemented by the specified date.
The remaining 70% seem to view the promise as unlikely to materialize within the stated timeframe, citing potential political hurdles, economic implications and international pushback.
If enacted, the tariff could significantly impact trade relations between the United States and its neighboring countries. Canada and Mexico are two of the U.S.'s largest trading partners, with billions of dollars in goods crossing the borders daily.
Economists have warned that such tariffs could disrupt supply chains and increase costs for American consumers.
Inflation may bump permanently back over 3% if a universal tariff is enacted, according to Goldman Sachs.
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