President Trump's imposition of tariffs on Canada, Mexico, and China has triggered concerns about potential inflation in the United States. Economists warn that these tariffs could lead to price increases for a wide range of goods, from gasoline and cars to clothing and alcohol. The tariffs are in response to what Trump says is a failure by these nations to address the flow of fentanyl and other drugs into the U.S.
Canada is by far America's biggest foreign supplier of crude oil. From January through November last year, Canada shipped the U.S. $90 billion worth of crude, well ahead of No. 2 Mexico at $11 billion. For many U.S. refineries, there's not much choice. Canada produces the 'type of crude oil that American refineries are geared to process,' Scott Lincicome, a trade analyst at the libertarian Cato Institute, told the Associated Press. 'It's a heavier crude.
All the fracking and all the oil and gas we make here in the United States — or most of it — is a lighter crude that a lot of American refineries don't process, particularly in the Midwest.' Of the tariffs on Canadian oil imports, Lincicome said, 'My guess is that it shakes out just through higher gas prices, particularly in the Midwest.' TD Economics figures that Trump's tariffs could push up U.S. gasoline prices by 30 cents to 70 cents a gallon. \ Shipments from Canada are dominated by oil and cars, as well as vehicle parts, bauxite and aluminum. Energy imports from the country, including oil and electricity, will be spared from the full 25% levy and face a 10% tariff, according to White House officials. They said that was intended to minimize upward pressure on gasoline and home-heating oil prices. \With China accounting for nearly 30% of all U.S. apparel imports, Bloomberg Intelligence estimates clothing prices could rise as much as 2% for brands that rely most on suppliers from the Asian country, including Aritzia Inc. and Tommy Bahama. Some companies have announced plans to reduce their sourcing from China, with Steven Madden Ltd. saying it plans on cutting the number of goods manufactured in China by 40% within a year. The tariffs are in response to what Trump says is a failure by the three nations to help prevent the flow of fentanyl and other drugs into the United States. \U.S. farmers are nervous, too, that Canada and Mexico will retaliate by slapping tariffs on American products such as soybeans and corn. That’s what happened in the first Trump administration. China and other targets of Trump tariffs hit back by targeting the president’s supporters in rural America. Exports of soybeans and other farm products dropped, so Trump spent billions of U.S. taxpayer money to reimburse farmers for lost sales. \Alcoholic beverages accounted for nearly a quarter of all U.S. imports from Mexico in 2023. Four in five beers that enter the U.S. from abroad come from south of the border, so do half of all hard liquor the country imports — mainly tequila and mescal. Canada is also a top supplier of distilled spirits including liqueurs and whiskey. Nearly half of U.S. imports of auto parts come from Canada and Mexico, and American brands are particularly reliant on those products. When it comes to specific products like air bags and seat belts, nearly 80% of the ones the U.S. import come from its North American neighbors. In addition to that, half of U.S. imports of assembled cars come from the two countries. \'Tariffs on these goods mean the U.S. would effectively be tariffing itself,' Bloomberg Economics’ Nicole Gorton-Caratelli wrote in a note on Jan. 21. 'U.S. carmakers in particular — a long-held symbol of American manufacturing — would feel considerable pain.' TD Economics notes that average U.S. car prices could rise by around $3,000 — this at a time when the average new car already goes for $50,000 and the average used car for $26,000, according to Kelley Blue Book. Cars drive along Preston Road in Plano. TD Economics says average U.S. car prices could rise by around $3,000 with new tariffs
TARIFFS CANADA MEXICO CHINA TRUMP INFLATION ECONOMY TRADE WAR FENTANYL
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