Trump’s tariff move risks higher prices, economic uncertainty, professor says
COLUMBIA, Mo. (KMIZ)
President Donald Trump announced he will be implementing 25% tariffs on imports from Canada and Mexico and a 10% tariff on goods from China, effective on Saturday.
However, the White House has not made it clear if it will provide exemptions to the tariffs, which could quickly raise prices for consumers in the United States.
During his presidential campaign, Trump threatened to levy tariffs on countries to get better cooperation in stopping the flow of illegal immigrants into the United States. He also boasted that the tariffs would help increase domestic manufacturing and generate more revenue for the federal government.
“The puzzling thing about tariff wars is the people who are ultimately harmed are your own citizens,” University of Missouri Economics professor Joesph Haslag said. “Getting into a trade war with China or Canada or Mexico seems rather foolish because American citizens are going to be hurt every time Mexico or Canada or China raises tariffs on U.S. products. It's their citizens that are going to be hurt and there's no real good solution in this case that makes a whole lot of sense.”
Trump has also said that China’s tariffs are aimed at forcing the country to make good on its alleged promise it would execute people caught sending fentanyl to the United States.
“Starting tomorrow, those tariffs will be in place,” White House press secretary Karoline Leavitt was quoted on Friday during a press conference. “For the illegal fentanyl that they have sourced to distribute into our country which has killed tens of millions of Americans. These are promises made and promises kept by the president.”
According to data from the CDC, the total combined drug overdose deaths from 2003-23 is 1,117,835, not “tens of millions” as Leavitt suggests.
Haslag predicts that consumers could see an impact on prices as soon as this weekend with potential lingering impacts as time goes along.
“I think it will have some immediate impact and then those responses are going to be metered and companies are going to take into stock exactly how sensitive consumers are to the prices,” Haslag said.
“We have very big deficits with those countries. Those tariffs may or may not rise with time,” Trump was quoted by CNN.
The tariffs carry political and economic risks for Trump, with the possibility of higher prices and disruptions in various sectors. Promising to lower grocery prices was something Trump leaned heavily on near the end of his presidential campaign.
“If you're concerned about the role that tariffs are going to play, you should be,” Haslag said. “They're not things that are going to be all that helpful. If the United States government had a strong case for it, they would be pointing out the size of the subsidies that are being played. This seems to be more about restoring manufacturing in the U.S. kind of reshoring. If that's the strategic outcome, there are probably far better ways that are less offensive to American consumers than imposing tariffs.”
In 2018, trump imposed a 25 percent tariff on imported steel in an effort to protect United States producers, however, two years after that tariff, the total employment in the U.S. steel sector fell by four thousand people. Some experts speculate that this was the result of steel companies having to pay higher prices for domestic steel.
Canada and Mexico have responded to Trump's new tariffs by issuing warnings about how they will impact goods and the economy of both countries.
“No one — on either side of the border — wants to see American tariffs on Canadian goods,” Canadian Prime Minister Justin Trudeau posted in a statement on X Friday.
Trudeau also claimed that fewer than 1% of fentanyl and undocumented immigrant crossings coming into the United States come from Canada.
Mexico President Claudia Sheinbaum responded to the news by saying she will “always defend the dignity” of her people.
“We have a Plan A, Plan B, and Plan C for whatever the US government decides. It is very important for the people of Mexico to know that we will always defend our people’s dignity, our sovereignty, and engage in dialogue as equals,” President Sheinbaum told reporters at a news conference that was recorded by CNN. “We’re always seeking dialogue with the U.S. government because, as mentioned the possibility of a tariff will have a significant impact on the U.S. economy.”
