Larry Kudlow: Trump says to Mexico and Canada – first America! ncvrs.com

If President Donald Trump believes that Mexico and Canada are damaging America’s national security by not being able to help the border enough to prevent illegal intersections, or to help the inflow of Fentanil and other drugs, or to overcome Mexican cartels – then I think that there is an absolute right to use your hard tariff diplomacy when you hit 25% tariffs in both countries.

This includes a 10% Customs Tariff in China, which delivers the Fentanil Medicine, which is then manufactured in Mexico and sent on the United States. China also underlines the USMCA’s North American Free Trade Agreement by building plants in Mexico and then throwing cheap cars into the United States without adhere to US domestic content and other rules.

With the announcement of President Trump and forcing these tariffs tomorrow, Karoline Leavitt’s announcement that President Trump was thinking is very clear that this is the president’s conclusion.

You have to wait for you to have a specific indicator of illegal border crossings or drugs or sexual trade. He does not yet see that he will participate in further negotiations with Canada and Mexico.

But he formulated the law. Tariffs are a legitimate tool for participating in national security policy and economic policy.

Probably, if Mexico and Canada meet Mr Trump’s requirements, the tariffs could be raised. But we don’t know that. And we are waiting for a statement from the president, maybe tonight or tomorrow.

By the way, Mexico relations with China have become a serious problem. Mexican imports from China have increased by 50% over the past 5 years. And Chinese investments in Mexico grow by the same 50%. The USMCA rules need to be changed to make explicit restrictions of Chinese content.

Currently, the United States operates a $ 170 billion trade deficit with Mexico, which is maintained in many product groups.

Canada is another story. The United States operates $ 60- $ 70 billion in commercial deficits, but if energy is removed, we actually have surplus with Canada – including car and manufacturing products. 60% of American oil imports come from Canada.

However, Canadian oil companies offer us a 20% discount, as their heavy crude oil needs to be refined as gasoline and diesel. As some oil experts point out, 25% tariffs will erase the 20% discount. And they fear that gasoline prices in the Midwest and in the northern states can jump 40-75 cents. So the oil industry hopes to withdraw the 25% tariff.

Dow Jones dropped 330 points on the tariffs announced by Mrs Leavitt. Wall Street continues to think that tariffs are inflation.

As I suggested before, it is not.

Of course, there may be some smaller one -time product prices. But exporters to the United States bear at least 50% of the growth of tariffs by reducing their prices to selling US consumers and businesses. This was our experience with China in Trump’s first cycle.

Inflation is the only way to accelerate in any lasting way if the Federal Reserve is open to print press.

Mr Trump criticized the Fed in Trump Truth Social Post on Wednesday for not being able to stop the enormous bidenflation that ruined the blue collar affordability over the last four years.

But Mr Trump is lower tax rates, deregulation, liberating energy production, a major reduction in federal spending and DC bureaucracy, and in itself deeply against inflation and growth. Therefore, inflation is not the question.

And yesterday, Mr. Trump announced by the social part of the truth that he would not bear the replacement of a huge US dollar in international trade. There was a 100% tariff in the so-called BRICS-Brazil, Russia, India, China and South Africa. King Dollar is also contrary to inflation.

Instead, Mr Trump’s tariff diplomacy is aimed at protecting America’s national security and economic security.

And insists … that America comes first.