US Imposing Tariffs

• President-elect Donald Trump plans to impose new tariffs on Canada, Mexico, and China
• The proposed tariffs include 25% on imports from Canada and Mexico, and an additional 10% on Chinese goods
• These tariffs are intended to address issues such as drug trafficking and illegal immigration
• The proposed measures could significantly impact trade relationships and supply chains across North America
• Economists warn of potential negative consequences for US businesses and consumers

Viewpoint 1: Tariffs as a Tool for National Security and Economic Leverage

‍TL;DR: Supporters argue that the proposed tariffs are necessary to address critical issues like drug trafficking and illegal immigration, and to gain economic leverage in trade negotiations. They view tariffs as an effective means to protect US industries and meet national security objectives.

‍Snippets from around the web

‍"On January 20th, as part of my initial Executive Orders, I will authorize all required documents to impose a 25% Tariff on all goods entering the United States from Mexico and Canada, along with its absurd Open Borders," Trump stated. "This Tariff will stay in place until the inflow of drugs, particularly Fentanyl, and all illegal immigrants cease this invasion of our nation!" - NBC News, https://www.nbcnews.com/politics/donald-trump/trump-says-plans-enact-new-tariffs-canada-china-mexico-first-day-offic-rcna181753

‍"When used properly, the threat of a new tariff from a U.S. president is a direct attack on foreign special interests—a way to break their illegitimate hold over their governments. The Trump administration successfully used the threat of tariffs to suppress European efforts to push carbon and digital-services taxes aimed at U.S. industries. His administration used similar threats to open markets in Asia to U.S. exports." - Heritage Foundation, https://www.heritage.org/trade/commentary/the-art-the-tariff-deal-another-way-trump-can-boost-our-economy

‍"Trump's strategy of using tariffs as a tool of diplomacy is not new. During his first term as president, he imposed tariffs on a range of goods, from steel and aluminum to technology products, in an effort to force foreign countries to bend to U.S. trade demands. His administration's "America First" agenda relied heavily on using tariffs as a means to protect U.S. industries and create leverage in negotiations." - CEO Today Magazine, https://www.ceotodaymagazine.com/2024/11/trump-vows-to-impose-new-tariffs-on-mexico-canada-and-china-a-bold-move-with-potential-economic-fallout/

‍"Trump's effort to use tariffs to protect US industries and meet national security objectives could backfire, given the practical implications and political ramifications." - S&P Global Commodity Insights, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/trump-s-proposed-tariffs-challenge-trade-agreement-stir-tensions-86557227

‍"The higher the tariff, the more likely it is the company will come into the United States and build a factory." - EV Magazine, https://evmagazine.com/news/the-trump-tariffs-pros-cons-global-impact

‍Viewpoint 2: Tariffs as Economically Harmful and Counterproductive

‍TL;DR: Critics argue that the proposed tariffs could lead to higher prices for consumers, disrupt supply chains, and potentially harm the US economy while failing to achieve their intended goals. They point to past experiences with tariffs and economic studies to support their concerns.

‍Snippets from around the web

‍"Economists and retail trade associations estimate that tariffs on incoming goods could impose an annual cost of $78 billion on American consumers. For instance, a pair of shoes priced at $50 could increase to nearly65, to the Retail Federation The price of a $2,000 mattress could surge by $190." - NBC News, https://www.nbcnews.com/politics/donald-trump/trump-says-plans-enact-new-tariffs-canada-china-mexico-first-day-offic-rcna181753

‍"We estimate the Trump-Biden tariffs will reduce long-run GDP by 0.2 percent, the capital stock by 0.1 percent, and employment by 142,000 full-time equivalent jobs. The effects of each tariff will be lower GDP, wages, and employment in the long run. The tariffs will also make the U.S. tax code less progressive because the increased tax burden would fall hardest on lower- and middle-income households." - Tax Foundation, https://taxfoundation.org/research/all/federal/tariffs/

‍"The 2018–19 tariffs had other negative effects. The U.S. tariffs reduced exports of U.S. manufacturers that relied on imported intermediate goods because those U.S. companies couldn't completely reconfigure their supply chains to offset higher costs. Trump's tariffs also brought on retaliatory tariffs by other countries, which caused some U.S. exporters to substantially lower the prices they charged abroad to maintain foreign market share." - Brookings Institution, https://www.brookings.edu/articles/tariffs-on-all-imports-would-create-chaos-for-business/

‍"So, did the Trump tariffs work in the end? According to economists from various nonpartisan and bipartisan think tanks, the answer is a resounding no. A CNBC study discovered that Trump's tariffs actually hurt consumers greatly and equaled one of the largest U.S. tax increases in decades. Researchers have also found that the Trump tariffs lowered the real income of American workers and reduced gross domestic product (GDP) growth." - Investopedia, https://www.investopedia.com/news/what-are-tariffs-and-how-do-they-affect-you/

‍"A lot vacuum cleaners are made in China, so that's one I could be sort of confident you're going to see some price effects on," he said. The tariffs would reduce American consumers' spending power by $90 billion on a range of products, including TVs, headphones, laptops and tablets, video game consoles, smart phones and other electronics, according to the Consumer Technology Association. - CBS News, https://www.cbsnews.com/news/trump-tariffs-consumer-prices-inflation-impact-what-to-buy-now/

‍Viewpoint 3: Tariffs as a Diplomatic Tool Requiring International Cooperation

‍TL;DR: Some experts argue that while tariffs can be a useful diplomatic tool, their effectiveness depends on international cooperation and careful negotiation within existing trade frameworks. This view emphasizes the need for a multilateral approach rather than unilateral action.

‍Snippets from around the web

‍"The tariffs suggested by Trump in his social media posts are likely to breach the terms of this agreement." - NBC News, https://www.nbcnews.com/politics/donald-trump/trump-says-plans-enact-new-tariffs-canada-china-mexico-first-day-offic-rcna181753

‍"Trump could be counting on the threat of tariffs to prompt an early renegotiation of USMCA, said William Reinsch, a former president of the National Foreign Trade Council. 'This strikes me more as a threat than anything else,' Reinsch said. 'I guess the idea is if you keep hitting them in the face, eventually they'll surrender.'" - Farrow, https://farrow.com/news/trump-vows-new-canada-mexico-china-tariffs-that-threaten-global-trade/

‍"Addressing the US-China trade war requires a multifaceted approach involving diplomacy, economic cooperation, and strategic planning. Meaningful negotiations between the US and China are essential to address root causes like intellectual property theft, forced technology transfers, and state subsidies. Strengthening domestic industries through investments in research, development, infrastructure, and worker retraining programs is also crucial." - The Organization for World Peace, https://theowp.org/reports/the-us-china-trade-war-a-strategic-framework-for-resolution-and-cooperation/

‍"The growing use of distortive subsidies alters trade and investment flows, detracts from the value of tariff bindings and other market access commitments, and undercuts public support for open trade. This publication finds that governments need to cooperate more on subsidies. It seeks to highlight the potential benefits of closer cooperation and considers some areas where this might be pursued constructively." - World Trade Organization, https://www.wto.org/english/res_e/publications_e/sub_trade_coop_e.htm

‍"Wilson urged the Canadian government to create a cabinet post to deal specifically with Canada-U.S. relations, and he said that a diplomatic resolution that keeps the tariffs from being put in place is the ideal scenario. Anderson similarly said he thought that the tariff threat was Trump's way of setting up negotiations on border security." - Business in Vancouver, https://www.biv.com/news/retail-manufacturing/bc-retailers-fear-trump-could-prompt-canada-us-tariff-war-9867196