Trump imposes sweeping tariffs, triggering global trade tensions. What products are affected?
President Donald Trump announced over the weekend that 25 percent tariffs will be implemented on goods imported from Mexico and Canada, along with an additional 10 percent fee on products from China. What products are affected by these new fees?
White House spokeswoman Karoline Leavitt reported that the new tariff rates went into effect on Saturday, February 1. She added that Donald Trump is considering implementing an additional 10 percent fee on all goods imported into the United States.
Goods affected by tariffs worth hundreds of billions of dollars
Products from Canada are subject to a 25 percent tariff. Only gas, electricity, and crude oil are subject to a lower rate of 10 percent. Last year, almost 100 billion USD worth of raw materials were imported from the USA to Canada.
Cars, alcohols, electronics
Regarding products from Mexico, experts cited by AP point out that the country is a significant exporter of cars and car parts to the USA. The market size reaches about 150 billion USD annually. Tariffs also affect alcohol. For popular tequila, the import size from Mexico to the USA is approximately 5 billion USD.
China mainly supplies electronics to the USA, with a value exceeding 130 billion USD. Tariffs have also been applied to import toys and sporting equipment, which exceed 30 billion USD, furniture, 20 billion USD, and footwear, almost 8 billion USD.
In response to the USA's decision, Canada and Mexico quickly introduced their tariffs, while China announced it would take "necessary countermeasures." The exact nature of these measures remains unknown.
Tariffs could cost the average consumer 2400 dollars
According to estimates by ING, implementing all the tariffs announced by Trump could increase the annual expenditure of an average American consumer by 2400 USD. Experts from Capital Economics predict that the effective tariff rate in the USA will rise from the current 2.4 percent to 31 percent, reaching its highest level in history.
Inflation could increase from the current 2.9 percent to around 4 percent, which is twice the Federal Reserve's target. This level would correspond to indicators from mid-2023 when the Fed maintained interest rates at the highest level in two decades.
Do tariffs harm the US economy?
Trump and his allies, including the new Treasury Secretary Scott Bessent, argue that "the tariffs introduced during Trump's first term did not contribute to inflation." However, economists from Capital Economics argue that previous tariffs were too low to impact the economy significantly.
The Brookings Institution notes that previous tariffs benefitted American industry, such as creating 1800 new jobs at Whirlpool and other companies producing washing machines. However, during Trump's first term, the overall number of jobs in the manufacturing sector fell from 12.4 million to 12.2 million, and the cost of creating these jobs was enormous.
