US President Donald Trump says he will announce the tariffs about all the imports of steel and aluminum to the United States, because transforming US trade relationship with the world.
This move could have a special impact on the neighboring Canada, which is the largest Aluminum supplier in the US. Trump also threatened to later introduce tariffs about other products from Canada as well as in Mexico.
He has already introduced a 10% tax on all products that have entered from China – which responded to their own measures.
The US president says these imports of imports are needed to help the American economy and to “protect” the land from illegal immigration and drug flow. Economists say they could increase the prices of Americans.
What are tariffs and how do they do?
Tariffs are taxes charged on goods imported from other countries.
Companies importing goods from abroad pay tariffs to the US government.
Trump introduced 10% of tariffs to all goods from China. So a product worth $ 10 would have additional fees for $ 1.
The president originally said that he would impose 25% of tariffs on goods from Canada and Mexico, but later agreed to stop them after both countries agreed to increase the security of the border.
Payment of the percentage of product value is the most common type of tariff. Another type imposes a fixed import figure, regardless of their value.
Why does Trump use tariffs?
Trump fulfills the promise of a campaign to introduce import duties against some American closest trade partners.
He claims that the tariffs will increase American production and protect jobs – for example in the US steel industry – as well as increasing tax revenues and economic growth.
He also sought to justify the metals tariffs – which he also presented during his first term – as a matter of national security.
Trump also says that he uses tariffs to “fight the whip of fental”, a powerful drug that causes tens of thousands of deaths every year from an overdose in the USA.
Its administration says that the chemicals that used the drug come from China, while Mexican gangs illegally supply and have fentanyl laboratory in Canada.
Canadian Prime Minister Justin Trudeau said that less than 1% of the fentanis who enters the US comes from his country.
What happens to China, Canada and Mexico?
China, Mexico and Canada together made up more than 40% of imports to the US last year, making them some of Trump’s most respected trade partners.
China
A 10% charge for all goods imported from China to the United States entered into force on February 4th.
Beijing avenged his own tariffs that came into force on February 10th. They include 15% of tariffs on American coal and liquefied natural gas products, and 10% of raw oil tariffs, agricultural machinery and large engine cars.
China has repeatedly expressed opposition to the new trade war of a species that developed between the two countries during Trump’s first presidency.
Canada
Trump paused for 30 days a proposed 25% tariff on all the goods that entered Canada – which was also supposed to start on February 4th.
Canada also stopped with a 25% retreat of 155 billion.
In exchange for Trump’s pause, Canadian Prime Minister Justin Trudeau said that Canada implements a “$ 1.3 billion border plan” to add “new helicopters, technology and staff to the border”, as well as “increased resources to stop the flow of fentanis.”
Much of the border security plan has already been announced in December.
Trump said the delay would allow the US to see “whether a final economic contract with Canada could be achieved.”
Mexico
The proposed 25% of Mexico tariffs were also delayed for a month, as well as Mexico measures against American goods.
Mexico President Claudia Sheinbaum agreed to send 10,000 members of the National Guard to the US-Mexican border to “prevent drug trafficking, especially Fentanil”.
President Sheinbaum said the US in return agreed to increase measures to prevent trade in a strong American weapon in Mexico.
Which products will be influenced?
During Trump’s previous time in power, he endured less restrictive tariffs at China. This time it seems that the tariffs are applied to all goods from China.
If measures against the goods from Mexico and Canada at the end of teaching, a number of subjects are expected to become more expensive.
Car production could handle the number of tariff effects.
Parts of the vehicle cross US, Mexican and Canadian borders several times before the vehicle is fully assembled.
The average price of a car in the US could increase by $ 3000 due to tax imports, the economy of the financial analyst proposed.
Other goods from Mexico that could be affected include fruits, vegetables, alcoholic beverages and beer.
Canadian goods such as steel, wood, cereals and potatoes would also probably get more price for US consumers.
Canadian energy would be targeted at 10% instead of 25%.
Will UK and Europe have to pay tariffs?
Trump said earlier by the BBC that the UK operated “outside the line” without giving further details, but suggested that the solution could be “elaborated”.
The United Kingdom Business Secretary, Jonathan Reynolds, said the UK should be excluded from the tariff because US exports export more products to the UK than imports.
The UK exports pharmaceutical products, cars and scientific instruments in the US.
Trump also said he could impose tariffs on the EU “pretty fast” because “they take almost nothing [from the US] And we take everything from them. ”
Last year, they had a $ 213 billion trade deficit with the EU – which Trump described as a “crime”.
The EU announced that it would “respond firmly” to any tariff. US companies Harley Davidson, who produces motorcycles, and whiskey distillery like Jack Daniel, have previously faced EU tariffs.
Do the tariffs cause inflation?
Economists have warned that tariffs are likely to increase prices for US consumers.
For example, sellers can increase the price of goods imported if they are forced to pay higher duties.
From 2018 to 2023. The imported washing machines recorded that the price of laundry equipment was 34%, according to official statistics, before they fell after the tariffs had expired.
Some experts suggest that these new tariffs could stimulate a wider trade war and worsen inflation.
Capitol Economics announced that the annual inflation rate could be increased from 2.9% to as much as 4% due to the newly announced tariffs.
