Trade showdown: Trump's last-minute talks with Canada and Mexico

Trump announced that he will impose a 25% tariff on Canada and Mexico. According to Bloomberg, the tariffs will take effect on February 4th unless a last-minute agreement is reached.

Mexico and Canada together account for nearly 30% of US imports.

The US President plans to hold last-minute talks on Monday morning. He emphasised that he will have separate discussions with Canadian Prime Minister Justin Trudeau and representatives of the Mexican government.

I don't expect anything dramatic. They owe us a lot of money, and I'm sure they're going to pay, said Trump before the planned talks.

Ongoing diplomatic negotiations suggest possible concessions. Canada proposes the creation of a joint task force on fentanyl, while Mexico is enhancing security measures at the border despite ongoing economic uncertainty.

The question of whether oil should be excluded from the tariffs remains unresolved. Canada and Mexico together account for approximately 70% of US oil imports.

Trump has also reiterated threats directed at the European Union, emphasising that tariffs "will certainly be introduced" and highlighting the significant trade deficit with Europe.

– They don't take our cars, they don't take our farm products – he claimed, referring to the EU. – They take almost nothing and we take everything from them – he added.

Trump's aggressive rhetoric has prompted Europe to pledge greater purchases from the US to reduce the sizeable trade deficit and placate the US President. Gas is poised to become the EU's bargaining tool and safeguard against the American President's 10-20% tariffs on European products.

The head of the European Commission has already discussed with Trump replacing Russian liquefied gas with American gas.

As Bloomberg notes, Trump's repeated threats have caused the value of the euro to decrease while the dollar has strengthened.