Tariffs latest publications
In what would be an act contrary the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) rules, President Donald Trump has announced that he will impose tariffs on all imports from Mexico.
May 31, 2019
Mexico | Trump’s Tariff Threat has the potential to be a game changer for Mexican Economy
Incremental tariffs (up to 25%) would likely push the Mexican economy into a recession; inflation risks, an overly hawkish Banxico and fiscal constraints would limit the room for countercyclical fiscal and/or monetary policies.
At BBVA Research we estimate that a tariff increase to 25% could bring Chinese GDP down 0.5 pp from our base scenario, in which China grows by around 6% in 2019. The impact on the other two trading blocks will be less severe, around 0.2 pp in the United States and 0.1 pp in the eurozone.
The trade war between China and the USA finally broke out on 6 July, when the US imposed 25% tariffs on US$34 billion worth of imports from China, to which China responded by applying the same tariff to the value of imports from the US.
There are concerns that the protectionist rhetoric and the so far limited tariff increases may lead to a full-blown trade war between the US and China which could put the brakes on world growth.