Donald Trump has long been threatening tariffs on products from Mexico, Canada and China.
The second president has argued that higher taxes will help migrate illegally and reduce Fentanyl’s smuggling to the United States.
On Saturday, the president has confirmed that Mexico and Canada products will be imported to 25 % of tariffs and 10 %.
However, the energy of Canada, including oil, natural gas, and electricity, is taxed at a 10 % tax rate. Taxes will be enforced on Tuesday.
The Trump administration states that this change will support domestic production, but it can have a wide range of negative results for US consumers.
Economists argue that the supply chain is confused and companies suffer from increased costs, leading to overall rise in price.
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Why did Trump target Mexico and Canada?
Canada and Mexico counterattack with retaliation tariffs
Both Mexico and Canada are greatly dependent on imports and exports, accounting for about 70 % of the gross domestic product (GDP), which takes more risks from new tariffs.
China depends only on 37 % of the economy, working to strengthen domestic production, and is not relatively vulnerable.
Here, we will look at places where US consumers have the greatest influence.
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Customs duties focusing on Mexico and Canada
Avocado -and other fruits and vegetables
According to the U.S. Ministry of Agriculture, the United States imports half to 60 % of fresh agricultural products from Mexico and imports 80 % of avocado.
Canada also supplies many US fruits and vegetables grown in the greenhouse on the other side of the US border.
This means that the increase in tariffs is immediately passed to consumers in a higher price.
However, since the United States is still growing a considerable amount of unique agricultural products, this change may promote domestic production.
However, economists have warned that these suppliers will increase prices by excessively dependent on domestic products.
Avocado from Mexico at a US store. Photo: Reuters
Gasoline and oil price
Canada offers about 60 % of US crude oil imports and about 10 % of Mexico, which can be affected by oil and gas.
According to the US Energy Information Bureau, the United States received about 4.6 million barrels a day from Canada last year and received 563,000 from Mexico.
Most US petroleum refining places are specially designed to handle Canadian products, which makes the supply of the supply sources complicated and expensive.
There have been several speculations that Mr. Trump may exempt from oil from new changes, but if he did not, the United States could see the up to 50 cents (40p) in Gallon. Economist predicts.
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Car and vehicle parts
The US automotive industry is a delicate combination of foreign and domestic manufacturers.
The supply chain is very complicated, and car parts and half vehicles may pass the United States and Mexico several times before the showroom is ready.
If this continues, the parts will be taxed each time the country moves, and the price will rise even greater.
To alleviate this, General Motors states that while brainstorming the manufacturing industry to the United States, we will rush to export Mexico and Canada.
Electronic product
When Donald Trump imposed 50 % of the imported washing machine during his first term in 2018, the price has been damaged for years.
In China, 10 % of tariffs can have the same effect on these devices, as it produces world appliances around the world, especially smartphones and computer.
The Biden administration has tried to do legislation to promote domestic production of semiconductors (microchips required for all smart devices), but for now, the United States is still in China for its personal electronic devices. I depend on it.
This means an increase in consumer prices unless high -tech companies can move their business away from Beijing.
Press the steel industry
The most profitable sectors from Trump tariffs are the steel industry and the aluminum industry.
For a long time, the government has been conducting a lobby activity on foreign suppliers -claiming that they are dominating the market, leaving us who are in danger of sufficient business and closure. I claim that it is.
The import of steel, which is rising, promotes domestic production and probably saves some plants.
However, when Mr. Trump increased steel tariffs during his first term, the price increased. The business leader said that they were forced to pass the cost and had a hard time completing the construction project within the budget.
Overall inflation
When the price of all these products is increased, the overall inflation is inevitably spread.
According to capital economics analysis, Canada and Mexico tariffs will be 3 % exceeding 3 % -this will be much higher than the 2 % target of the Federal Reserve, and China will increase further.
