President-elect Donald Trump’s latest round of proposed tariffs has everyone talking, including CNBC’s Jim Cramer. Cramer took to X (formerly Twitter) to share his confusion over Trump’s sudden decision to slap a 25% tariff on imports from Canada alongside Mexico and China. The tweet reads: “I expected China to get hit with a huge tariff right out of the box. But Canada? Really? Musk be an inside joke.”
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The most intriguing part of the tweet is “Musk,” which may or may not be a typo. It's hard not to speculate that Cramer could be referring to Elon Musk, a close ally and major supporter of Trump. Musk, known for his involvement in everything from electric vehicles to space exploration, has been a visible figure in U.S. industry and policy conversations. If Cramer is alluding to Musk, it raises questions about what role the billionaire might have played in this decision or whether there's some insider context we're all missing.
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Trump’s Tariff Announcement Stirs Up Markets
Trump’s most recent action is a complete economic shock. He declared on Truth Social that all imports from Canada and Mexico would be subject to a 25% tariff starting on January 20. He also intends to increase duties on Chinese imports by 10%. This is all part of his plan to address illegal immigration and drug inflows, particularly fentanyl. Trump’s words were blunt: “This tariff will remain in effect until such time as drugs, in particular Fentanyl and all illegal aliens, stop this invasion of our country!”
Financial markets are in turmoil as a result of Trump’s strategy. The Mexican peso and the Canadian dollar instantly fell, with the Canadian dollar hitting a low not seen since April 2020. The peso sank 0.9% to 20.50 against the U.S. dollar.
Robin Brooks, an economist at the Brookings Institution, pointed out that this may be the beginning of a much larger adjustment. “To put this fall in perspective, the Mexican peso fell 10% in just a few days right after Trump’s surprise win in 2016,” Brooks said.
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Investor Reactions Are Mixed
Not everyone is sold on Trump’s plan. Market strategist James Thorne questioned how feasible it is to impose a 25% tariff on imports like Canadian Sour Crude Oil, which is crucial for U.S. refining. “Do you really think Mr. Trump will put a 25% tariff on Canadian Sour Crude Oil?” Thorne asked. He highlighted how interconnected and complicated some of these trade relationships are, implying that such a move might create more problems than it solves.
Then there’s a prominent investor, Bill Ackman said that Trump’s tariffs are less about trade and more about leverage. On X, Ackman noted, “Trump is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America, fulfilling his America First policy.”
Ackman sees Trump’s tariff threats as a way to pressure Mexico, Canada and China into complying with U.S. demands regarding drug trafficking and illegal immigration.
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