Trump imposes steep tariffs on trading partners, sparking concerns among US consumers

US President-elect Donald Trump recently announced that he will sign an executive order after taking office in January, imposing a 25% tariff on all imports from Mexico and Canada and a 10% tariff on Chinese imports. The move triggered a widespread backlash and concerns that U.S. consumer prices could rise.

Basic concept of tariff

A tariff is a tax or fee imposed on imported goods whose purpose is to raise the price of imported goods, thereby encouraging U.S. companies and consumers to choose products made in the country. During the election campaign, Trump promised to promote the revival of domestic manufacturing by implementing tariff policies. However, economists warn that this practice could lead to higher inflation and interest rates.

Reactions from Mexico, Canada and China

• Mexico: Mexican President Claudia Sheinbaum Pardo warned at the press conference that Trump's tariff policy would have a negative impact on the economies of the two countries. She said Mexico would take retaliatory measures until businesses jointly owned by both parties are threatened.
• Canada: Ontario Governor Doug Ford said that Trump's tariff policy will deal a devastating blow to workers and employment in Canada and the United States.
• China: Spokesman of the Chinese Embassy in Washington The X platform said that "there are no winners in trade wars or tariff wars".

Major U.S. imports from Mexico and Canada

• Canada: The main U.S. imports from Canada include oil, wood, and paper. If these goods are subject to a 25% tariff, it will have wide-ranging implications for industries such as printed books and housing construction.
• Mexico: Mexico is one of the largest exporters to the United States, sending approximately $475 billion of goods to the United States in 2023. Automobiles and their parts are the main commodity category from Mexican EXP to the United States. In addition, Mexico also sends a large number of agricultural products, such as avocados, to the United States and EXP, which may lead to an increase in American food prices.

Impact of Chinese Imports

• China: Major U.S. imports from China include electronics, textiles, furniture, and toys. If a 10% tariff is imposed on Chinese goods, the prices of these goods will also rise, further increasing the burden on American consumers.

Price pressures on consumers

According to the Peterson Institute for International Economics report, the average American household may spend an additional $2,600 or more per year as a result. This means that American consumers will face higher prices when buying goods in supermarkets, department stores and more.