What happened? On Saturday, President Trump issued an executive order applying additional tariffs of 25% to all imports from Canada and Mexico, with the exception of Canadian oil and energy products, which will face a 10% levy. Imports from China will face a 10% tariff over and above existing US tariffs. To apply these tariffs, President Trump used the International Emergency Economic Powers Act (IEEPA), an executive authority that allows him to respond to emergencies through economic means, for the first time. These tariffs will come into effect on 4 February. Canada has already announced retaliation including similar tariffs on US goods. On the other hand, Mexico''s President Claudia Sheinbaum directed her economy minister to implement ''Plan B'' countermeasures, including tariff and non-tariff actions. Sources familiar with the matter suggest Mexico is considering levies of 5 to 20% on American pork, cheese, fresh produce, steel, and aluminium products, whilst initially sparing the automotive sector. BNPP Exane View: Besides the direct implications of the tariffs addressed earlier in the morning in BBVA, SANTANDER: Implications from new tariffs in Mexico, below are our thoughts on the implications for the broader sector: Implications for the European banking sector. . While we think trade war implications are likely to weigh against broader European banks in a context where outlook for economic growth remains weak, we think this is likely to keep inflation risks to the upside, which should reduce potential interest rates cuts. . As we''ve outlined in Five For 2025, the start of the year was expected to be bumpy due to the risk of Trump tariffs. However, a lot of this downside risk should already be discounted in share prices. . On the other hand, there are some counterbalancing potential positives to watch throughout 2025 - as for example potential retaliation / policy response in China and Europe - which could be helpful to mitigate the...