Market Analysis

Image Credit: Reuters

U.S. President Donald Trump is moving forward with his plan to "level the playing field" by imposing tariffs on goods from Mexico and Canada, though the final outcome remains uncertain, according to Goldman Sachs CEO David Solomon at a conference in Australia.

Trump announced on Monday that he would impose a 25% tariff on imports from Mexico and Canada, effective Tuesday, and stated there was "no room left" for a deal to avoid these tariffs by addressing fentanyl trafficking into the U.S.

Trump also reiterated his intention to raise tariffs on Chinese imports from 10% to 20% to punish Beijing for not curbing fentanyl shipments.

Solomon explained that Trump strongly believes in addressing trade imbalances and is aggressively pursuing his vision. However, Solomon noted growing caution among business leaders due to the uncertain impact of Trump's policies, particularly how far they will go.

When asked about Blackstone CEO Stephen Schwarzman's prediction that the U.S. would avoid a recession in 2025, Solomon agreed that the likelihood was small but not zero.

Solomon also mentioned that Goldman Sachs had adjusted its annual filing to align with changes in U.S. administration policies on diversity, equity, and inclusion, which were affected by recent executive orders.

Edwin Cass, CIO of the Canada Pension Plan Investment Board, added that it was too early to gauge the effect of Trump's tariffs on Canada, but acknowledged the close economic ties between the two nations, with the U.S. being Canada's largest export market. He noted that Canada would focus on diversifying its economy to stay competitive globally.

Paraphrasing text from "Reuters" all rights reserved by the original author