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Canadian minister says Trump was joking when he said Canada could become the 51st state
Washington : Mexico and Canada have hit back at Donald Trump’s tariff plans, warning about the potential economic impact and urging the president-elect to choose cooperation over the prospect of retaliatory trade wars. In an ominous but unsurprising development on Monday, Trump announced on social media that he intended to slap heavy tariffs on America’s neighbours and top trading partners as soon as he returns to the White House in January. Donald Trump speaks on the southern border with Mexico in August. Only a fraction of his “beautiful wall” was built during his first term – and mainly to replace older dilapidated sections. Credit: AP Under the plan, Trump says a 25 per cent tariff would be imposed on Canada to the north and Mexico at the southern border unless they crack down on drugs and illegal immigrants coming into the US. In addition, he threatened that China would receive “an additional 10 per cent tariff” on top of tariffs already in place on Chinese goods unless the country implements the death penalty for drug dealers connected to the fentanyl trade. But as global markets digested the news, Mexico President Claudia Sheinbaum warned the tariff hike would fail to curb illegal migration or the consumption of illicit drugs in the US. Mexico President Claudia Sheinbaum said the tariffs would hurt her country and the US. Credit: Getty Images She also described the plan as “unacceptable” and something that “would cause inflation and job losses in Mexico and the United States”. “One tariff will follow another and so on, until we put our common businesses at risk,” Sheinbaum said in a letter to Trump, which she read at her daily press conference and planned to send to the president-elect later in the day. “Dialogue is the best path to achieve understanding, peace and prosperity for our two countries ... I hope our teams can meet soon.” Mexico is currently the United States’ top trade partner, representing 15.8 per cent of total trade, followed by Canada at 13.9 per cent. But Trump made it clear during his election campaign that he would readily use tariffs as leverage to tackle the tide of illegal immigrants coming into America. After Trump’s social media post, Canadian Prime Minister Justin Trudeau spoke to the president-elect as he sought to tamp down concerns about the potential impact on his country’s economy. Trevor Tombe, an economist who authored a report on the consequences of US tariffs on Canada’s economy, warned a recession was likely if Trump followed through on the 25 per cent tariff. The country’s premiers have warned a trade war would cause immense damage to their respective economies, while the Canadian dollar fell to its lowest level since May 2020. Trudeau, who has called an emergency meeting with worried provincial premiers for Wednesday (Thursday AEDT), told reporters he had a “good call” with Trump. Then-president Donald Trump and Canadian Prime Minister Justin Trudeau in 2019. Credit: AP “We obviously talked about laying out the facts, talking about how the intense and effective connections between our two countries flow back and forth,” he said. “This is a relationship that we know takes a certain amount of working on, and that’s what we’ll do.” In an echo of Trump’s politics, Trudeau initiated a U-turn on immigration, restricting flows of new migrants. He said last week Canada’s system had been exploited by “bad actors”. Trump’s vision for tariff hikes on Mexico, Canada and China were laid out in a Truth Social post on Monday night. “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he said. In a follow-up post, he also announced that the US “will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America”. The reason, he said, was China’s failure to curb the number of drugs entering the US. China is a major producer of precursor chemicals that are acquired by Mexican drug cartels and others to manufacture fentanyl, a synthetic opioid that accounts for about 70 per cent of all drug overdoses in the US. “Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before,” Trump said. Get a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for the weekly What in the World newsletter here .Three leading Egyptian banks—the National Bank of Egypt (NBE), Banque Misr, and QNB AlAhli—have extended joint financing worth EGP 4.235bn to Al-Zahi Group. This financing aims to support key development projects, with NBE serving as the lead arranger, financing marketer, financing agent, and document bank within the alliance. Banque Misr acts as an initial main arranger, financing marketer, and account bank, while QNB AlAhli fulfills the role of an initial main arranger. The funding will be directed toward various projects, including facility design, land reclamation, infrastructure development, agricultural land leveling, establishing irrigation and drainage systems, and executing electrical and mechanical works. The signing ceremony was attended by prominent banking and business leaders, including Yehia Abou El-Fotouh, Deputy CEO of NBE; Sherif Riad, CEO of Corporate Banking Credit and Syndicated Loans at NBE; Mohamed Khairat, Head of Corporate Credit and Syndicated Loans at Banque Misr; Abdel Rahman Talaat, Head of Corporate Finance and Investment at QNB AlAhli; and Ahmed El Zahi, Chairman of Al-Zahi Group. Yehia Abou El-Fotouh highlighted that the financing aligns with NBE’s strategy to support vital economic sectors, fostering growth across industries and value chains. He commended the efforts of the bank’s team in conducting comprehensive studies and facilitating cooperation that culminated in this financing deal. Sherif Riad emphasized NBE’s commitment to backing large-scale development projects in Egypt, particularly those that enhance food security and contribute to economic stability. He underscored the importance of expanding agricultural land and production, which reduces imports, improves trade balances, and creates job opportunities by leveraging modern technological methods. Mohamed Khairat reiterated Banque Misr’s dedication to financing vital projects across diverse sectors to stimulate economic growth and enhance Egypt’s competitiveness. He noted that this partnership reflects the bank’s strategic goals of supporting the national economy, aligning with Egypt’s Vision 2030 for sustainable development. Khairat also praised the collaboration among the participating banks, highlighting the shared commitment to advancing the national economy. QNB’s Abdel Rahman Talaat stressed the importance of the banking sector’s role in financing projects with significant economic and social impacts. He emphasized QNB Egypt’s focus on supporting agricultural development to achieve food security, create thousands of jobs, and contribute to sustainable development goals. Talaat also noted QNB Egypt’s growing influence in fostering major national projects through its strong relationships with international financial institutions. Ahmed El Zahi expressed gratitude for the collaboration with Egypt’s leading banks, underscoring the importance of such partnerships in driving the nation’s development. He highlighted Al-Zahi Group’s diverse expertise in integrated general contracting, including river works, sidewalk construction, dredging, thermal and hydropower stations, roads and bridges, dams, and water and sewage networks. The company also specializes in complementary activities such as ready-mix concrete production, insulation, and polyethylene works. This joint financing underscores the critical role of Egypt’s banking sector in fostering economic growth and supporting sustainable development across the nation.