As of February 1, 2025, President Trump signed executive orders imposing new tariffs on Canada, Mexico, and China.
Canada, Mexico, and China together account for over a third of the products imported into the United States.
The new tariffs could result in increased costs for consumers and potentially higher inflation.
Details of the Tariffs
Canada and Mexico: All goods imported from these countries will face a 25% tariff.
Exception: Canadian energy products will only have a 10% tariff.
China: All goods will be subject to a 10% tariff.
Economic Impact
Sectors Affected:
Mexico: Auto and electric equipment sectors expected to be most affected.
Canada: Mineral processing sector is likely to face disruptions.
United States: Farming, fishing, metal, and auto production sectors are at significant risk.
Consumer Expectations
Companies may choose different strategies to handle the additional costs:
Pass costs onto consumers through price increases.
Absorb the tariff costs themselves.
Negotiate lower prices with foreign suppliers.
Previous tariffs on China showed that many of these costs were likely transferred to American consumers, suggesting a repeat scenario with these new tariffs.
Conclusion
The new tariffs are poised to disrupt trade, affecting the supply chain and potentially leading to higher prices across various industries.