EconomyNov 26, 2024
Trump Takes Aim At America’s Three Largest Trading Partners, Creating New Problems for the Most Richly-Valued Market In History
Import Levies
Noah Weidner
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Investors have largely shrugged off President-elect Donald Trump’s bold claims about deporting millions and imposing steep tariffs on imported goods. Perhaps it’s time to take him seriously. On Monday, Wall Street cheered Trump’s selection of a hedge fund manager to lead the Treasury, estimating that it would bring level-handedness to the Trump economic agenda. But that was before Trump promised new tariffs.
Who blinks first? Trump has already committed to assess tariffs as high as 60% on Chinese goods, hoping to spur a domestic manufacturing renaissance. Unfortunately, all three tariffs are likely to cause profound economic shock — driving up the cost of agricultural products, vehicles, and electronics to make up for the tariffs. The 25% tariff is intended to pressure Canada and Mexico, which rely on the US for 83% and 75% of their exports, respectively. Yet, Mexico’s president, Claudia Sheinbaum Pardo is ready for a trade war, warning, “The response to one tariff will be another.”
