America president-elect Trump has stated he will impose tariffs as soon as he comes back to office, he threatens northern and southern neighbors with a 25 % tariff on all the goods entering the United States. The effects are already happening even before the inauguration day. Last year, around $1 trillion worth of commodities traveled across the northern and southern borders of the United States, demonstrating the integration of the North American supply chain. America gets half of its fruits and vegetables from its two neighbors. Furthermore, on the day following Mr. After Trump’s statement, the share prices of GM and Stellantis dropped 9% and 5%, respectively, because over half of the pickup trucks that the companies sell in the US are manufactured in Canada or Mexico. According to Goldman Sachs, the tariffs may result in a 0.9% increase in core consumer costs, which do not include food and energy.
If the Tariffs are ever imposed, the consumers are the first whos suffers, that is what politicians and Mr. Trump does not recognize.Â
Nobody is aware of how much Mr. Trump wants to avoid trade and how much he views tariffs as negotiation tools. Therefore, it may be easy to exhale in relief that these tariffs are a showy means of gaining power. He has already had a “wonderful conversation” with the president of Mexico, Claudia Sheinbaum. He vowed to impose a 25% tax on all Mexican imports in 2019, but when a border agreement was negotiated between the United States and Mexico, he did nothing.
Scott Bessent, who is Mr. Trump’s choice for Treasury Secretary, and another financier, Howard Lutnick, who has been appointed as Commerce Secretary, have stated that tariffs are for negotiation. However, some members of Mr. Trump’s inner circle are fundamentally against trade.Â
Source: Economist
