On November 25, Donald Trump promised increased tariffs on goods coming from Mexico, Canada, and China starting on the first day of his administration. This policy could increase costs for businesses and also American consumers. Trump says the move is in retaliation for illegal immigration and “crime and drugs” coming across the border. “On January 20th, as one of my many first Executive Orders… a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” said Trump, according to CNN.
Trump has also said that China will face higher tariffs on its goods. They could increase 10% above any existing tariffs until it prevents the flow of illegal drugs into the United States.
According to AP News, China has announced it will ban their exports of germanium, gallium, antimony, and other high tech materials to the United States. China did this to lash back at U.S. limits on semiconductor-related exports. This ban on the export of goods may cause even more increased costs especially the electronics side, which includes LEDs, phones, laptops, cars, and much more.
Ultimately, if these tariffs are enacted, they could seriously damage America’s supply chains and from there, the economy itself. Through this though, these tariffs also add some political tension between Canada, Mexico, and also China. Investors believe that the American dollar can be strengthened through this, but the market will take a massive hit. Costs of various goods would increase dramatically.
