Last month, President-elect Donald Trump announced On his first day in office, he plans to impose a 25% tariff on all products from Canada and Mexico, and an additional 10% on China. In his words, the levy “will remain in effect until we stop drugs, especially fentanyl, and all illegal aliens from invading our country!”
During his campaign, Mr. Trump argued that tariffs would have great positive effects, including restoring factory jobs, reducing government debt and allowing his administration to subsidize child care costs.
But Trump's plan is both bad policy and bad politics. Here's why:
Despite the significant increase in the proportion of illegal immigrants From Canada to the United StatesThis number is only a fraction of the traffic on the southern border. The problem along the northern border appears to be manageable, and Canadian authorities are taking steps to address it.
The number of encounters at the southern border has declined following more aggressive measures by Mexico and President Biden's executive order making it more difficult for people to enter the U.S. without authorization to apply for asylum. dropped up to 4 years low in 2024, even though President Trump helped kill a bipartisan bill to strengthen border security. Of the more than 1.5 million illegal immigrants, custody Additionally, only 15,608 people were convicted of criminal offenses during the fiscal year, most of them for illegally entering another country or driving under the influence.
For the first time in years, the number of fentanyl-related deaths in the United States has increased. I refused. The cause is not entirely clear, but contributing factors include increased drug seizures at the southern border, a crackdown on Mexican cartels, and major disruptions to the supply chain of Chinese distributors of fentanyl precursors. It will be done.
There is a good chance that President Trump's tariff plan will come to fruition. explode USMCA is the latest version of NAFTA, which President Trump himself signed with much fanfare in 2018. To justify the tariffs, the Trump administration can cite a treaty provision that says any of the three signatories can take “such measures as it deems necessary” to protect itself. Security interests. “However, Commerce Department rules require that tariffs be related to impacts on specific industries and not imposed to coerce other countries on matters unrelated to this concern.'' .
Canada, Mexico, and China are America's largest trading partners. Canada supplies America has a high proportion of wood, aluminum, plastic, and our country's crude oil. Auto parts cross the borders of Mexico, Canada, and the United States multiple times before they end up in “Made in America” cars. Many foreign electronics manufacturers use Mexico as a “production partner” before entering the U.S. market. Mexico and Canada grow 32% of the fresh fruit and 34% of the fresh vegetables sold in the United States.
When tariffs are imposed, the prices of these and many other goods go up. Estimates vary, but virtually all economists agree that it will likely cost each American household several thousand dollars a year.
And some sectors will be hit harder than others. For example, during the tariff war in 2018 and 2019, U.S. farm revenues declined. dropped It increased by $27 billion, with much of the shortfall covered by federal relief. Nor did tariffs on imported steel lead to job increases in U.S. factories.
China is prepared It is preparing for a new tariff war by building factories in other countries to assemble parts and manufacture finished products for sale in the United States and other countries. China may lower the price of its currency against the dollar to lower export costs. buy the product From other countries. limit Supply of batteries used in electric vehicles and drones. Or reduce American companies' access to metals and critical minerals essential to making chips, solar panels, and other high-tech products. In fact, this week, China Export ban Providing gallium, antinomy, and germanium to the United States is also perhaps a signal to the incoming Trump administration, as the Biden administration is restricting the Chinese government's ability to manufacture advanced chips.
There are no winners in the 21st century tariff wars. Given this reality, and a poll showing that 69% of Americans (and 59% of Republicans) believe tariffs would raise the price of domestic goods “a lot” or “somewhat,” some observers One begins to wonder whether President Trump will actually impose tough tariffs.
It's unclear what kind of concessions President Trump wants to extract, but investors in the U.S. stock market, which continued to rise despite the threat of tariffs, dragged down Asian and European stocks appear to be betting on a relatively positive outcome. they may be right. Mr. Trump may receive a cautious response from President Xi Jinping by imposing 10% tariffs on China, rather than the 60% he had talked about during the campaign.
Canadian Prime Minister Justin Trudeau may have helped his cause by flying Kiss the Ring and report to Mar-a-Lago that Canada will deploy more police, drones and helicopters to the border. And Trump's false claims Mexican President Claudia Sheinbaum's agreement to “block migration to the United States through Mexico and effectively close our southern border” could set the stage for Mexican President Claudia Sheinbaum's declaration of victory.
If Trump — Who Was It? said “For me, the most beautiful word in the dictionary is 'tariff.'” – As I begin my second term by pulling back from bad projects, one thing is certain: Most people, both at home and abroad, I'm sure you'll breathe a sigh of relief.
Glenn C. Altshuler is the Thomas and Dorothy Litwin Professor Emeritus of American Studies at Cornell University.
