Tinker, Tailor, Tariff, Trump
Economy Series
Girl Friday’s series on Trump’s tariff wars
February 3, 2025
What a week of tariff talks - and it’s only Monday. Donald Trump agreed to a 30-day pause on imposing tariffs on Canadian and Mexican goods. The AP reported that the two nations agreed to increase border security at the U.S. border. Among other measures aimed at reducing cartel activities, Canada joined a joint task force with the U.S. to counter organized crime. Will this be the end of the tariff wars? Will we be able to close this series? We certainly hope so, but we feel these negotiations will continue. Additionally, Trump has not backed down from his promise to levy tariffs against EU member states.
February 2, 2025
The United States is now in Donald Trump’s tariff era.
Reuters says that Trump imposed a 25% tariff on goods from Canada and Mexico and a 10% tariff on China. Given the swift responses from Canada and Mexico, this may lead to a trade war against the United States. Trump’s tariffs will hit U.S. consumers the hardest and won’t just impact one industry. For example, these three trading partners export car parts, clothes, food, and wood to U.S. companies and consumers. Even companies with Made in America taglines often source critical parts from abroad. Everyone from your local Main Street furniture retailer to large conglomerates will be impacted. The difference between them is this: large corporations can try to shift some production to other countries, whereas smaller companies don’t have the same networks or finances to make that change.
When tariffs are imposed broadly across goods, consumers are the ones who eat the cost. The company importing the goods absorbs the tariffs, not the country exporting the goods. Contrary to what was said on the 2024 campaign trail, if your local Made in America clothing retailer imports fabrics from Mexico, they pay the price for those textiles, not the country of Mexico. Even wealthy companies will not take on all those additional fees, so they increase the cost of their products. Tariffs do not just impact individual consumption. Here’s a perfect example: steel. Reuters said that the U.S. Steelworkers union, which they note is the largest industrial union in North America, criticized Trump's tariffs on Canada. How will increased costs of steel impact our nation’s transportation infrastructure? Will U.S. towns and cities be able to afford necessary bridge repairs if the price of steel skyrockets? Will our safety be impacted?
When tariff wars happen, governments often encourage their citizens to buy products sourced wholly from their nation to avoid the additional costs and show national unity during the trade conflict. Prime Minister Justin Trudeau did just that today. In addition to imposing a retaliatory tariff on U.S. goods, Trudeau addressed Canadians and said, “Many among us will be affected by this, and we will have some hard times. I ask you to be there for each other. Now is the time to choose Canada.” President Sheimbaum of Mexico said, “I've instructed my economy minister to implement the plan B we've been working on, which includes tariff and non-tariff measures in defense of Mexico's interests.” Reuters notes that her social media post did not specify Mexico's targets within the US market. Trump has also promised to impose tariffs on the EU. What will their response be, and how will it impact U.S. and EU consumers? How will these tariff wars impact our relationships with other nations?
