From Investing.com: 2025-02-10 02:42:00

Geopolitics I: President Trump demands control over drug trade and migrant flows from Mexico, while also targeting Chinese companies using Mexico to evade US tariffs. For Canada, Trump aims for economic and national security cooperation to secure US energy future. Trump’s tariffs on Colombia and Mexico signal his “America First” policy, with Mexico agreeing to border security measures. Canada’s oil exports to the US make it a key partner, prompting Trump’s negotiating tactics to assert control. Trump’s vision includes a North American security zone and closer integration with Canada for energy resources.

Geopolitics II: Tariffs did not boost inflation for US consumers in 2018, with services inflation remaining low during Trump’s presidency. Goods deflation has supported the Federal Reserve’s rate-cutting campaign, as substitution and shifting consumer preferences can offset price increases. Inflation remains a concern as services disinflation lags behind overall inflation, potentially leading to interest rate hikes. While tariffs could impact economic growth, a global trade war is considered a low-probability event. Inflation expectations are high, with consumers expecting rates between 2.7% and 3.0% in the coming years. Tariffs may not affect inflation expectations without significant demand stimulus. Labor costs may rise due to reliance on US workers, but productivity growth could mitigate this. China’s exports are growing, but devaluing currency may not offset tariff impact. Overall, the impact of tariffs remains uncertain.



Read more at Investing.com: The Art of the Tariff Deal – What Does Trump Ultimately Want from Canada?