Tariff Wars: The Latest

President Donald Trump is following through on his promise to levee tariffs on Canada, Mexico and China. He argues the tariffs will boost US manufacturing, protect jobs, raise tax revenue and grow the economy.

Tariffs are tax on imported goods to the United States. These are added to the price a buyer pays a foreign seller. In turn, companies typically pass their higher costs onto their customers.

China, Canada and Mexico

Trump introduced a 10% tariff on all goods from China. In retaliation, China’s finance ministry said that, starting February 10, it would impose tariffs of 15% for U.S. coal and 10% for crude oil, farm equipment and some cars and pickup trucks.

Canada was set to move forward with a retaliatory tariff of 25% on products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. However, Canadian Prime Minister Justin Trudeau and President Trump had a last-minute phone call on Monday and a 30 day pause was agreed upon. Canada will be implementing its previously announced $1.3 billion border plan, as well as committing to appointing a “fentanyl czar” and listing cartels as terrorists.

Canada is the top customer for U.S. goods and services exports and a critical supplier of goods and services integral to the U.S. economy. Canada buys more U.S. goods than China, Japan, France and the United Kingdom combined.

For Mexico, a 25% tariff on goods would effect fruits, vegetables and alcohol products. Mexican President Claudia Sheinbaum agreed to bolster border enforcement efforts after speaking with Trump about his demand to crack down on immigration and drug smuggling. Mexico agreed to reinforce its northern border with 10,000 National Guard members to stem the flow of illegal migration and drugs. In return, the U.S. would limit the flow of guns into Mexico

“For humanitarian reasons, we must help the United States address its fentanyl consumption crisis, which is leading to overdose deaths,” Sheinbaum said in a press conference Monday.

American Cost

By raising the price of imports, tariffs can protect American manufacturers. However, a study

“As president, it is my responsibility to ensure the safety of ALL Americans, and I am doing just that. I am very pleased with this initial outcome,” Trump wrote on his social media site Truth Social.