If you believe that Trump’s new tariffs on China, Canada, and Mexico don’t affect you, take another look. These tariffs will affect jobs and wages, inflation, exports, etc.
Tariffs are taxes a country’s government forces on imports from other countries.
So, why is Trump placing tariffs on these countries in the first place? Trump wants better border security from Canada and Mexico. He doesn’t like the trafficking of drugs and migrants into the U.S. “The sustained influx of illegal aliens has profound consequences on every aspect of our national life – overwhelming our schools, lowering our wages, reducing our housing supply and raising rents, overcrowding our hospitals, draining our welfare system, and causing crime.” said The White House. Trump is blaming the three countries for not doing enough to stop the flow of illegal aliens and fentanyl, which is a lethal substance in extremely small doses.
He declared initial victories because in response to the tariffs, both Canada and Mexico agreed to strengthen their border security to prevent the flood of illegal immigrants and drugs. This shows that from an economic standpoint, the U.S. is bound to do well. The decrease in illegal aliens should keep jobs open for Americans, keep wages constant, maintain crime, etc. The president of Mexico has said that she would send 10,000 national guard members to the U.S.-Mexico border.
Canada has also agreed to cooperate, but its citizens have started to push back. If this agreement isn’t enough for Trump, both countries will most likely apply tariffs of their own on the United States leading to a trade war. As of now, the U.S., Canada, and Mexico have agreed to postpone the tariffs for a month.
Now, what do these tariffs mean for the U.S. and individuals in particular? Trump believes tariffs act as a powerful bargaining tool. He disguises tariffs as a policy that’ll push U.S. manufacturers to produce goods domestically. So placing tariffs on imports from other countries would lower their GDP since they wouldn’t need to produce as many goods for trade as before. The United State’s GDP, however, would begin to rise because they’d be making more products of their own. Gross Domestic Product is the sum of the goods and services an economy produces in a certain period of time.
“So the idea is, the tariffs in general are supposed to promote people buying stuff that’s made in the country …Trump is using them as a negotiating tool because the countries…what they know is that if they have to pay a tax and raise their prices they’re gonna sell less merchandise.” Social Studies Mr. Reynolds said.
However, of course, all this comes with a high cost. The 25% tariffs on imports from Canada and Mexico, will increase consumer prices and taxes to 1.2 trillion as well. If Trump goes forward with his tariffs, the burden will fall on regular or average Americans. Tariffs mean high prices for groceries, cars/gas prices, construction material, and other everyday items.
To sum up, Trump’s new tariffs on Canada, China, and Mexico (the United State’s three largest trading partners) will increase prices for consumers and some businesses on imports from these countries. Although the individuals may not benefit from the taxes, GDP might do better. The force of taxes on trading partners is really to stop the flow of drugs and illegal aliens into the country, according to the white house.
