US President Donald Trump’s sweeping tariffs on Canada and Mexico are set to roil supply chains for products ranging from automobiles to avocados — with industries girding for cost increases.US imports from both countries covered nearly $900 billion in goods as of 2023, and supply lines between the three North American neighbors — who share a trade agreement — are deeply integrated. Fresh tariffs would pose complications for businesses with a footprint across one or more countries. Analysts expect Trump’s 25 percent across-the-board tariffs on Canada and Mexico would hit the automobile and electronics sectors hard.While Canadian energy exports have a lower 10 percent rate, this still marks an uptick as Washington previously did not impose tariffs on Canadian oil imports.Mexico and Canada also account for significant US agriculture imports, meaning the duties could add to prices of popular foods like avocados and tomatoes.- Canada: energy, autos -Nearly 80 percent of Canadian goods exports go to the United States, amounting to some $410 billion in value, according to Statistics Canada.The levies will hit Canadian vehicle and energy industries hard, given that they represent over 40 percent of Canada’s exports to the United States.The energy exports involve mainly crude oil and bitumen, alongside natural gas.The auto sector in Ontario — the nation’s most populous province — faces particular challenges.This is because “various parts cross the border multiple times before ending up in a finished product,” said Robert Kavcic, at Bank of Montreal, in a research note.The United States imports construction materials from Canada, too, meaning tariffs could drive up housing costs.More than 70 percent of imports of two key materials homebuilders need — softwood lumber and gypsum — come from Canada and Mexico, said National Association of Home Builders chairman Carl Harris.”Tariffs on lumber and other building materials increase the cost of construction and discourage new development,” he said.- Mexico: autos, electronics -Mexico’s exports to the United States represented 84 percent of the goods it sold to the world last year, according to its National Institute of Statistics.This amounts to over $510 billion.The auto industry spanning vehicles and parts, alongside the electronics and machines sector, will likely see the greatest impact.They send around half of all their production to the United States, analysts from Capital Economics said.The latest 25 percent tariffs would also affect sectors like food.Mexico supplied 63 percent of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.More than 80 percent of US avocados come from Mexico — meaning higher import costs could push up prices of items like guacamole.- Basis for tariffs -Trump invoked emergency economic powers in imposing tariffs on Canada, Mexico and China, arguing they had failed to stem the flow of illegal immigrants and drugs into the United States.Chinese goods faced an added 10 percent tariff under the latest announcement.But analysts have said that US tariffs on Canadian and Mexican imports could be incompatible with the United States-Mexico-Canada Agreement (USMCA), a trade deal Trump inked during his first presidential term.Some anticipated that Trump’s posturing could be a way for Washington to gain an upper hand ahead of a 2026 deadline to review the USMCA.- Potential impact -Economists warned that heavy US tariffs — and retaliatory measures — could tip Canada and Mexico’s economies into recession, while the United States would face risks of a shallow downturn too.”The tariffs send a clear message, reinforcing Trump’s America First stance while using trade as a geopolitical tool,” EY chief economist Gregory Daco told AFP.Markets will view this as heightened political uncertainty while investors brace for inflationary pressures and supply chain disruptions, he said.Mexican President Claudia Sheinbaum has already announced that her country would impose retaliatory tariffs.”Mexico and Canada could challenge the move under USMCA, while China may counter with targeted restrictions,” Daco said.A bigger concern, he said, is that the situation could escalate into a prolonged and broader conflict.

Marco Rubio arrived in Panama Saturday on his debut trip abroad as US secretary of state, as he looks for how to follow up on President Donald Trump’s extraordinary threat to seize the Panama Canal.Rubio’s mission came as Trump imposed steep tariffs on Canada, Mexico and China — another step showing a far more aggressive US foreign policy.Rubio will travel later to four other small Latin American countries for an agenda focused on migration, a highly unusual first trip for the top US diplomat, whose predecessors were more likely to start the job with language of cooperation with major allies.Trump has refused to rule out military force to seize the Panama Canal, which the United States handed over at the end of 1999, saying that China has exerted too much control through its investment in surrounding ports.In his inaugural address, Trump said that the United States will be “taking it back” — and he refused to back down Friday.”They’ve already offered to do many things,” Trump said of Panama, “but we think it’s appropriate that we take it back.”He alleged that Panama was taking down Chinese-language signs to cover up how “they’ve totally violated the agreement” on the canal.”Marco Rubio is going over to talk to the gentleman that’s in charge,” Trump told reporters.Rubio will tour the Panama Canal and meet President Jose Raul Mulino on Sunday, a US official said. Mulino, generally considered an ally of the United States, has ruled out opening negotiations after complaining to the United Nations about Trump’s threat.”I cannot negotiate, much less open a process of negotiations on the canal,” Mulino said Thursday.The issue “is sealed. The canal is Panama’s,” Mulino said.Mulino’s government, however, has ordered an audit of CK Hutchison Holdings, the Hong Kong company that operates ports on both sides of the canal.- What does ‘taking it back’ mean? -Trump’s more aggressive foreign policy postures come as his administration also upends foreign aid, with US media characterizing recent firings at the nation’s international development agency as a “purge.”Amid the upheaval, which has seen swaths of humanitarian funding frozen, USAID’s websites were down over the weekend, with Democratic Senator Chris Murphy criticizing the “total destruction” of the agency.The State Department has also altered its travel advisory language to get rid of references to trans people, changing LGBTQ to LGB.In Panama, it remains to be seen how Rubio carries out Trump’s threat. Some experts believe that Trump was simply applying pressure and could declare a win by the United States ramping up investment in the canal — an outcome that most Panamanians would welcome.Rubio has played down the military option but also did not contradict his boss.”I think the president’s been pretty clear he wants to administer the canal again. Obviously, the Panamanians are not big fans of that idea,” Rubio told SiriusXM radio in an interview before the trip.He acknowledged that Panama’s government “generally is pro-American” but said that the Panama Canal is a “core national interest for us.””We cannot allow any foreign power — particularly China -– to hold that kind of potential control over it that they do. That just can’t continue,” Rubio said.The canal remains the crucial link between the Atlantic and Pacific oceans and coasts, with 40 percent of US container traffic going through it.Trump administration officials said they were blaming not Mulino but previous Panamanian president Juan Carlos Varela, who in 2017 — during Trump’s first term as president — moved to sever ties with Taiwan in favor of China.Mauricio Claver-Carone, the US special envoy on Latin America, charged that Panama unfairly raised costs for US ships while also seeking assistance from the United States for canal upkeep. Panama attributes rising costs to the effects of a drought, exacerbated by climate change.

In Uganda, millions of schoolchildren have benefitted from a universal education program backed by the United States. In South Sudan, US assistance has helped thousands of flood victims at risk of cholera.With one swoop of the pen, President Donald Trump froze the bulk of US foreign assistance for three months on returning to office, demanding a review to ensure all money meets his “America First” principles.The Trump administration has since issued waivers for food and other humanitarian aid. But aid workers say uncertainty reigns — and that the impact is already being felt by some of the world’s most vulnerable.Even if US assistance returns after the 90-day review, aid workers fear long-term consequences from the cutoff, and some observers see a lasting blow to US credibility as China and other powers woo the developing world.”Even if the funding eventually turns back on, great damage will have been done,” said Peter Waiswa, an accountant in Kamuli, Uganda who coordinates aid as part of a network known as the Compassion Connectors.”Missing drugs for days for the HIV/AIDS patients can cause death,” he said.Waiswa said that some schools in the universal education program that relied on US assistance have already given notices for children not to report to school.In Aweil in the northern reaches of impoverished South Sudan, orphanage teacher James Akoon Akot said that 3,000 people who lost their homes in floods were promised relief by international groups backed by US assistance.”The problem is that aid is used for both immediate relief and reconstruction,” he said.”If this decision to cut off funds is not reconsidered soon, there is a very real possibility that people will begin to die of hunger and diseases in South Sudan,” he said.- Uncertainly reigns -The United States has long been the world’s largest provider of development aid, giving $64 billion in 2023.Among its most prominent programs is PEPFAR, the anti-HIV/AIDS initiative started under former president George W. Bush that is credited with saving some 26 million lives.Secretary of State Marco Rubio in a memo signed on January 24 froze all US assistance with waivers for “emergency food” and, outside of development, weapons for Israel and Egypt.In a follow-up memo, he exempted other humanitarian assistance including shelter and medicine, appearing to give the greenlight for anti-retroviral drugs funded by PEPFAR.But Suzy Dzimbiri, a nurse in Zumba, Malawi, said she heard of people stockpiling whatever medicine they can and that one local charity that administered HIV/AIDS treatment, named Lighthouse, quickly closed down.In Washington, a congressional aide who follows humanitarian assistance said that even a nine-day shutdown in theory affects one million daily doses of HIV/AIDS medication — and that guidance was still murky.”It sounds like people expect PEPFAR to go ahead, but we have nothing in terms of specifics,” the aide said.”We do know of cases where there has been medicine sitting on the shelf and ready to go and that it’s been ordered to stay on the shelf” pending guidance from Washington, the aide said on condition of anonymity.”PEPFAR was supposed to be our Marshall Plan. The idea that we would just flip a switch and it would all turn off shows us to be capricious — we don’t actually care — and that going forward they probably do need to look to countries like China,” the aide said.- ‘We don’t want to see people die’ -Explaining his decision to issue further waivers, Rubio said, “We don’t want to see people die and the like.”But he said that the waiver process was rightfully forcing groups to justify spending as “historically we’ve gotten very little cooperation.””We have this thing that I’ve called the foreign aid industrial complex — all of these entities around the world that are getting millions and millions of dollars from the United States,” Rubio said in an interview with SiriusXM.”We have to make sure that it’s aligned with our national interest.”A senior official from a US-based organization feared that the priority on “emergency” assistance was part of a broader plan to say eventually that the United States need not fund anything else.”Even the term ’emergency food’ is a contradiction in terms. You go without food for a few days, and I’ll tell you what emergency food looks like,” said the official, who requested anonymity so as not to upset US government contacts.The official said that the most affected by the cutoff were local groups that did not have financial reserves — exactly the types of organizations that US officials want to build up.”This is essentially like burning down the foundations with the professed aim of renovating your house.”