Within the first few weeks of his presidency, Donald Trump has launched numerous executive orders, statements, and plans. One of the plans is to levy large tariffs against Canada, Mexico, and China. The President has proposed a 25% additional tariff on imports from Canada and Mexico, and a 10% additional tariff on imports from China (whitehouse.gov).
A tariff is a tax levied on imported goods from a foreign country. They are typically used to boost domestic industries by raising the prices of imported goods, making domestic goods seem more favorable by comparison. Trump began this trend early in the second term of his presidency by implementing a 25% tariff on steel and aluminum. Tariffs may also be implemented to advance foreign policy goals, using these tariffs as leverage against foreign governments, which seems to be Trump’s current strategy. Often, tariffs can lead to retaliation from other countries, sometimes beginning a “trade war” in which both countries implement trade barriers against the other. The costs of tariffs are always felt by consumers, who have to adjust to higher prices (BBC). Ramapo economics teacher Mr. Witterschein adds that “the cost of protecting your domestic industry causes prices to rise domestically.”
According to a fact sheet published by the White House, the Trump Administration is linking these tariffs to the emergency state declared at the US-Mexico border and the current drug crisis, especially in relation to the rise of fentanyl. These tariffs will be used to “hold [these three countries] accountable” for the crisis. The briefing claims that the tariffs will remain in place until deadly drugs, as well as illegal immigration into the United States, are more strictly managed by the governments of these countries (whitehouse.gov).
The effects of these tariffs will most likely be felt as higher prices, with most economists predicting that costs would be mainly borne by consumers, retailers, and manufacturers. Concerns have been raised by both manufacturers and consumers about rising inflation and damage to the economy. (apnews). Ramapo senior Keira Duffy mentions that she is “worried that these tariffs will raise prices and worsen inflation.” How these tariffs will affect the economy, whether positively or negatively, will have to be seen in the long run. “Will tariffs cause companies to relocate to the US?” Mr. Witterschein wondered, mentioning that “trade wars might scare some companies”.
Despite a month-long delay on these tariffs, President Trump claims, “We’re on time with the tariffs, and it seems like that’s moving along very rapidly” (apnews). It seems that their implementation is likely, and the full effects of them, both nationally and globally, are yet to be seen.
