Here’s How Badly Trump’s New Tariffs Threat Would Wreck the Economy
Donald Trump wants to slap tariffs on China, Mexico, and Canada on his first day in office, which would have devastating effects on supply chains and drive up costs on many companies that do business in the United States.The president-elect made the announcement Monday on Truth Social, saying that he would institute a 25 percent tariff on goods from Canada and Mexico until drugs and migrants stopped arriving at the border.“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump posted. “Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”In a separate post, Trump complained about China sending illegal drugs to the United States and threatened that country with a 10 percent tariff.“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States—But to no avail,” Trump posted. “Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”The three countries are America’s biggest trading partners, and many industries rely on exporting goods to them in addition to imports. These include car companies, farmers, and food packagers. In all, Canada, Mexico, and China make up more than a third of all U.S. imports and exports, with millions of jobs depending on them. Last year, the three countries bought over $1 trillion of U.S. exports and the U.S. imported nearly $1.5 trillion of goods and services from them.These tariffs, added to the costs of goods in the U.S., would cause prices to skyrocket as companies would pass their costs to the consumer. Other countries would likely retaliate with tariffs on American products, hurting industries stateside. By all accounts, his plan would cripple the economy, and it has been criticized by most economists. Companies would be far more likely to take their business elsewhere rather than pay tariffs or shell out the high cost of relocating their operations to U.S. soil.Plus, the U.S. is currently part of a free-trade agreement with Canada and Mexico that Trump bragged about renegotiating during his first term. Tariffs would be a blatant violation of that agreement and also set off a trade war in North America. For a president who is riding a wave of economic dissatisfaction, however unjustified, into office, this will not bode well.
Donald Trump wants to slap tariffs on China, Mexico, and Canada on his first day in office, which would have devastating effects on supply chains and drive up costs on many companies that do business in the United States.
The president-elect made the announcement Monday on Truth Social, saying that he would institute a 25 percent tariff on goods from Canada and Mexico until drugs and migrants stopped arriving at the border.
“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump posted. “Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”
In a separate post, Trump complained about China sending illegal drugs to the United States and threatened that country with a 10 percent tariff.
“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States—But to no avail,” Trump posted. “Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”
The three countries are America’s biggest trading partners, and many industries rely on exporting goods to them in addition to imports. These include car companies, farmers, and food packagers. In all, Canada, Mexico, and China make up more than a third of all U.S. imports and exports, with millions of jobs depending on them. Last year, the three countries bought over $1 trillion of U.S. exports and the U.S. imported nearly $1.5 trillion of goods and services from them.
These tariffs, added to the costs of goods in the U.S., would cause prices to skyrocket as companies would pass their costs to the consumer. Other countries would likely retaliate with tariffs on American products, hurting industries stateside. By all accounts, his plan would cripple the economy, and it has been criticized by most economists. Companies would be far more likely to take their business elsewhere rather than pay tariffs or shell out the high cost of relocating their operations to U.S. soil.
Plus, the U.S. is currently part of a free-trade agreement with Canada and Mexico that Trump bragged about renegotiating during his first term. Tariffs would be a blatant violation of that agreement and also set off a trade war in North America. For a president who is riding a wave of economic dissatisfaction, however unjustified, into office, this will not bode well.
