U.S. Tariffs Spark Recession Fears in Canada and Mexico

The U.S. has announced a 25% tariff on Canada and Mexico, a move that could have significant economic implications for both countries. According to Capital Economics, the tariffs could potentially plunge both the Canadian and Mexican economies into recession later this year, as exports to the U.S. account for around 20% of their GDP.

In response to the U.S. tariffs, Mexican Congress President has endorsed lawmakers' decisions, signaling a potential ripple effect in the cryptocurrency market. Meanwhile, Mexico has called for the enforcement of tariffs on the U.S., which could further escalate tensions between the two countries.

Canada, too, is preparing for the U.S. tariffs, with Prime Minister Trudeau stating that the country is ready to face the consequences. Canadian officials have also confirmed that they will proceed with a retaliatory tariff plan against the U.S., despite an executive order warning of potential broader or higher tariffs in response.

The U.S. tariffs, set to take effect on February 4th, include an additional 25% tariff on imported products from Canada and Mexico, as well as a 10% tariff on energy resources from Canada. The White House has warned that retaliatory tariffs could lead to increased tariff rates.