Donald Trump assumed the presidency of the United States for the second time on Jan. 20 and immediately signed a raft of executive orders. Trump was firm in his stance, assuring that his return would bring a “golden era for the United States” through a complete restructuring of the country's economy and international policies.

He thus reaffirmed his intention to impose 25% tariffs on Mexico and Canada starting February 1, citing their insufficient efforts to stop migration and fentanyl trafficking.

“We are thinking in terms of 25% on Mexico and Canada because they are allowing huge numbers of people in. Canada is also heavily abusing, huge numbers of people coming in and fentanyl coming in,” he said.

In his inauguration speech, he also said that he plans to strengthen the American economy by imposing tariffs on foreign imports.

“Instead of taxing our citizens to enrich foreign countries, we will be imposing tariffs and taxes on foreign countries to enrich our citizens,” Donald Trump said.

He added, “We are creating the Foreign Revenue Service to collect all the tariffs, duties, and revenues—massive amounts of money that will be coming into our treasury from foreign sources.”

Canada responds

Following Donald Trump's statements, Canada's Minister of Foreign Affairs, Mélanie Joly, called on Canadians to remain calm. Joly assured that they already have a plan in place to prevent the tariffs: "We will work on preparing a response, working with the cabinet to look at possible retaliation.”

In the long term, he said they will continue to fight for their interests and defend jobs across the country.

“We ask all Canadian political leaders to stand united, as now more than ever we must put our country first,” Joly said.

Dominic LeBlanc, Canada's Minister of Finance, said that they had been preparing for this announcement for weeks, so it did not take them by surprise, given Donald Trump's unpredictable nature.

“Our country is absolutely prepared to respond to any of these scenarios,” said the minister. However, “we continue to believe that it would be a mistake on the part of the American government to apply these tariffs, a mistake in terms of the cost of living in the United States, employment in the United States and the security of supply chains, and it would clearly be a difficult time for our country's economy.”

Reactions from Mexico

In November, when the then-president-elect first mentioned his intention to impose tariffs on all Mexican imports, the country's president, Claudia Sheinbaum, was clear that “one tariff will be followed by another in response.”

For his part, the country's Minister of Economy, Marcelo Ebrard, assured that imposing tariffs was “like shooting yourself in the foot”.

He added that the tariffs would have serious consequences for the U.S. economy, including the loss of 400,000 jobs, a slowdown in economic growth, and a negative impact on businesses and consumers.

Ebrard warned that the tariffs would double the fiscal costs faced by U.S. companies that produce in Mexico. “The impact for businesses would be enormous,” he said. “Mexico is not looking for conflicts or divisions, but rather to build a stronger and more united region,” Ebrard said.

Impact on foreign economies

Chile has had a relatively weak currency, depreciating around 5% in 2024, with a significant drop in value toward the end of the year.

Economic analyst at the Andrés Bello University and Open BBK, Alejandro Ursúa, explained to Freshfruitportal.com that President Trump's main campaign promise is to strengthen the American economy, and for that, he spoke of "practically a trade war with China.”

He explained that this creates speculation and affects emerging economies like Chile, an exporting country.

In this sense, he commented that this situation may affect Chile since trade tensions could worsen between two of its commercial partners—the United States and China. "On the other hand, we see that China has weaker growth than expected. Added to the tariff barriers for the sales of its products, it will also be a country that will demand fewer inputs for its production," he said.

As a consequence of the above, in the Chinese market, he said, “we see that they may have a drop in their demand, which would generate fewer dollars in the national economy; somehow, a perfect storm was configured that makes the Chilean economy have a dollar over CLP$1,000.”

Recommendations

Ursúa said that the important thing is to be able to navigate in this complexity, “and one of the important challenges for Chilean products exported to the world is to look for new destinations, such as Asia Pacific, not only thinking about China but also other markets such as India or European markets that in some way also look favorably on Chilean fruit production”.

He specified that the products currently being harvested and exported were made with cheap inputs, “so obviously it is the best of all worlds. But we have to consider purchasing new inputs to prepare for the new growing season.” I fail to understand the thinking behind this wedge.

In this regard, the economist's recommendation “is to be very cautious and to be planned in the inputs. In addition to trying to manage the cash flow in a good way”.

Ursúa concluded by saying, “To the extent that the sector is clear about income levels and how to optimize budget distribution, I recommend being very rational concerning consumption and trying to plan cash flow very well.”