U.S. tariffs imposed by President Donald Trump on imports from Canada, Mexico, and China are rattling markets and stirring sharp reactions from economists. The measures, which include a 25% duty on most Canadian and Mexican goods and a 10% tariff on Chinese imports, have heightened concerns over supply chain disruptions and increased costs for American businesses and consumers.
What Happened: Mohamed El-Erian, Chief Economic Advisor at Allianz, highlighted market reactions on social media platform X. "Same outcome for Canada in terms of both the 30-day ‘pause' and the currency retracement," El-Erian wrote on Monday.
His analysis, supported by a currency chart, showed the Canadian Dollar trading at 1.4421—a minor decline from previous levels following a volatile spike to 1.4791 on Monday. The chart's clear peak and subsequent correction suggest heightened market activity amid tariff-related news.
El-Erian's commentary extended to the Mexican Peso, which exhibited a dramatic surge to 21.2879 before retreating to 20.6045 over three days. The rapid fluctuations were observed on a chart amid news of a temporary tariff pause.
The pause comes after a call between Trump and Mexican President Claudia Sheinbaum, who confirmed on X that Mexico would deploy 10,000 National Guard troops to its northern border as part of a broader security and trade pact.
Former Treasury Secretary Larry Summers noted Canada’s importance as a trade partner. “Canada is our friend. Canada is an important market for American products. Canada is a crucial co-producer with American automobile companies that enable North America to compete with Asia and Europe,” he wrote, directly challenging the tariff approach.
Economist Justin Wolfers highlighted a post from former National Economic Council member Brendan Duke while using a “Sex and the City” metaphor to analyze trade tensions.
Wolfers argued that transactional diplomacy alienates economic partners, echoing Duke's point that "the main accomplishment of Trump's fake almost trade war is that no business is going to make a huge capital investment assuming tariff-free North American trade, even after the USMCA renegotiation."
Why It Matters: The U.S. Chamber of Commerce and finance experts warn that these measures could trigger higher prices on everyday items, ranging from auto parts to construction materials. With one-third of U.S. imports coming from these nations, the full impact on sectors like automotive and consumer electronics remains uncertain.
Investors and market analysts will be closely monitoring developments as high-level trade talks continue under the oversight of officials including U.S. Secretary of State Marco Rubio and Treasury Secretary Scott Bessent.
Read Next:
Image Via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
