The 10% tariff that Trump placed on Chinese imports in February was doubled to 20%, and Beijing retaliated today with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
Canadian Prime Minister Justin Trudeau said his country would slap tariffs on more than $100 billion of American goods over the course of 21 days.
Mexico President Claudia Sheinbaum said today she’ll announce the products Mexico will target Sunday in a public event in Mexico City’s central plaza, perhaps indicating Mexico still hopes to de-escalate the trade war set off by President Trump.
Trump’s moves raised fears of higher inflation and the prospect of a devastating trade war even as he promised the American public that taxes on imports are the easiest path to national prosperity. He has shown a willingness to buck the warnings of mainstream economists and put his own public approval on the line, believing that tariffs can fix what ails the country.
When Trump started the biggest trade war since the 1930s in his first term, it drew criticism from mainstream economists who favor free trade.
But it didn’t do much damage to the U.S. economy. Or much good. Inflation stayed under control. The economy kept growing as it had before. And America’s massive trade deficits, the main target of Trump’s ire, proved resistant to his rhetoric and his tariffs: Already big, they got bigger.
The trade war sequel that Trump has introduced in his second term is likely to be a different matter altogether. Trump appears to have grander ambitions and is operating in a far more treacherous economic environment this time.
The United States last year did nearly $2.2 trillion in the trade of goods — exports plus imports — with the countries the president is targeting: $840 billion with Mexico, $762 billion with Canada and $582 billion with China.
Energy imported from Canada, including oil, natural gas and electricity, will be taxed at a lower 10% rate — a concession to households in the U.S. Northeast and Midwest that depend on Canadian energy.
The following are just a few imported goods whose prices may be hit first:
1. Auto production
2. Gas
3. Computers
4. Clothes
5. Toys
6. Tequila
7. Canadian whiskey
8. Mexican avocados
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