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Businesses and shoppers in the U.S. are bracing for higher prices on everything from gasoline to guacamole, as President Trump renews his threat to impose steep tariffs this weekend on imports from two of the country's biggest trading partners.
Trump told reporters at the White House Thursday that he intends to follow through with his threat to slap a 25% tax on imports from Canada and Mexico starting Saturday, in response to what he called a flow of immigrants and drugs across the country's northern and southern borders.
General Motors told financial analysts on Tuesday that it could shift some pickup truck production out of Mexico and Canada if tariffs are imposed. But the automaker is reluctant to act while the trade landscape is still uncertain.
"We are prepared to mitigate near-term impacts," said CEO Mary Barra. "What we won't do is spend [a] large amount of capital without clarity." The auto industry in North America is highly integrated, relying on manufacturing in all three countries.
Mexico is a leading producer of flat-screen TVs.
Canada is also a major supplier of crude oil to U.S. refineries, especially in the Midwest. "Increasing expenses by 25% is going to lead to higher costs at the pump for U.S. consumers and higher input costs for businesses around the country," said Matthew Martdin of Oxford Economics.
Mexico and Canada would likely respond to any tariffs by imposing taxes of their own on U.S. exports.
Tariffs on goods from the United States’ three largest trading partners will go into effect on Saturday, a Trump spokeswoman confirmed Friday. Goods from Mexico and Canada will be subject to 25 percent tariffs and those from China will be hit by a 10 percent tariff. Those countries account for more than a third of the goods and services that are imported to or bought from the United States, supporting tens of millions of American jobs, and all three of their governments have promised to answer Mr. Trump’s levies with tariffs of their own on U.S. exports.
In a press briefing on Friday, the White House press secretary, Karoline Leavitt, said the president would put in place a 25 percent tariff on goods from Mexico, a 25 percent tariff on goods from Canada and a 10 percent tariff on goods from China.
Ms. Leavitt said the president had chosen to impose tariffs because the three countries “have all enabled illegal drugs to pour into America.”
“The amount of fentanyl that has been seized at the southern border in the last few years alone has the potential to kill tens of millions of Americans,” she said. “And so the president is intent on doing this.”
The tariffs are likely to initiate the kind of disruptive trade wars seen in Mr. Trump’s first term, but at a much larger scale.
Mexico, China and Canada account for more than a third of the goods and services imported to or bought from the United States, supporting tens of millions of American jobs.
All three governments have promised to answer Mr. Trump’s levies with tariffs of their own on U.S. exports, including Florida orange juice, Tennessee whiskey and Kentucky peanut butter.
The tariffs will immediately raise costs for the importers who bring products across the border. In the nearer term, that could disrupt supply chains and lead to product shortages, if importers choose not to pay the cost of the tariff. And in the longer run, companies may choose to pass the cost on to American consumers, raising prices and slowing the economy.
Mr. Trump’s desire to hit allies and competitors alike with tariffs over issues that have little to do with trade demonstrates the president’s willingness to use a powerful economic tool to fulfill his domestic policy agenda, particularly his focus on illegal immigration.
Thanks @BaluBalu. That’s good to know.”Front running is useless, unless others react and push the prices farther in the intended direction.”
Former White House ethics lawyer: Trump actions ‘pushing the limits’ common in dictatorships
Best post in another TDS thread.
Let me guess the next 4 years...same old stuff.
And now the Dems scream about inflation...mmm...where were you when inflation hit the ceiling?
Best post in another TDS thread.
It already is. Look into Gemini Earn and the impact of its counterparty risk, which was VERY VERY similar to the GFC and CDOs. I was making *nice* interest on my then-crypto savings but after a few months I really got queasy and got out completely ..... soonafter the 'crypto winter' began and the lawsuits started. Dodged a bullet there, I did since many folks are still waiting to get some/all of their money back.I can see crypto being the next liar loans, sub-sub prime type debacle and leading to the next crisis down the road. Add: When NFT's come back run for the hills.
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