Canada's Minister of Energy and Natural Resources Jonathan Wilkinson discusses tariffs, energy exports, the US Canada Energy Union, and the potential impacts of future Canadian elections.
president Donald Trump's The announcement of tariffs in Mexico and Canada was delayed for at least a month, but if it was finally implemented, it could drive a rise in the prices consumers pay for products affected by tariffs .
Last weekend, Trump announced that a 25% tariff on imported products would be effective on February 4th in Canada and Mexico, and a 10% tariff on Canadian energy products. I did. Canada and Mexico have threatened retaliatory tariffs in response to Trump's tariff plans.
The president has reached an agreement with Canada and Mexico to delay tariffs at least a month after announcing measures to combat fentanyl smuggling and illegal immigration across the US border.
Although tariffs in Canada and Mexico are pending for the time being, potential future implementations could result in higher prices for certain products if US consumers are ultimately enabled.
What will happen to Trump's tariffs in China, Canada and Mexico?
President Trump has touted tariffs as a negotiation tool and a source of tax revenue. (Photo by Photo Somodevilla/Getty Images/Getty Images)
“If we assume that tariffs in Mexico and Canada will be in effect next month or so, we can see prices will rise on many products,” says Dan Savikas, vice president of policy and government affairs for the Taxpayer Protection Union. He spoke to. work.
In an interview with Fox Business, Scott Lincicome, VP of General Economics and Trade Policy at Cato Institute, said, “The three major areas for potential consumer pain will be food, energy and automobiles.” Ta.
“In food, we import lots of fresh seasonal produce and beer. We import meat from Mexico and some other things,” he explained. “These are perishable items that cannot be stocked, and in the case of avocados, whether in the US or overseas, there is actually no suitable replacement. For example, Mexican avocados are given immediate tariffs to consumers. – There's no other place to go.”
Voters refuse to promote Trump tariffs. Most people believe that policies will hurt the economy
Avocados are one of the Mexican products and you can see price increases when tariffs are in effect. (Getty Images/Camilo Friedman via Getty Images/Bloomberg)
Lincicome explained that the automotive industry is more complicated, with suppliers and produce in the US, Canada and Mexico made up of North American automotive supply chains.
“We apply tariffs to these things and effectively guarantee some significant cost increase to automakers in all three countries, and how much of that amount is then handed over,” Lincicom explained. . “Depending on who you talk to, it's between $1,000 and $6,000 on a new car, and again there's some amount that the manufacturer can absorb. Of course, there's less investment, employment and production in the process. .”
“We import so much crude oil from Canada, but that's a kind of crude oil we don't actually make, and it's heavy crude oil. It's crude, they make cheap or easy for the US to make. You can't actually process the light crude oil,” he explained.
Trump's “external revenue services” are collected from importers rather than from “foreign sources.”
Tariffs on interconnected North American car supply chains could lead to higher prices for new car. (Getty Images/Getty Images via Michael Tercha/Chicago Tribune/Tribune News Service)
Lincicome added that prices are likely to rise for appliances such as washing machines, dishwashers and air conditioners made in three countries.
Other products pointed out by Savickas include tariffs, and include wood and related products, taking into account the amount of Canadian wood imported by the US, and Mexican tomato products, so we see prices rise. I pointed out that it can be done.
Brandon Parsons, an economist at the Graziadio Business School at Pepperdine University, said the consumer price index (CPI), the popular inflation meter, could rise by 1.3 percentage points if tariffs were implemented. He told Fox Business that his research suggested.
Given the CPI of 2.9% in December, inflation could potentially exceed 4%. This is at a level that doubles the Federal Reserve target. Parsons said that an average household would likely increase costs by about $1,000 if their CPI increased by 1.3%, and in some cases it could increase relatively quickly.
“Assuming these tariffs pass in a month, we expect grocery prices to rise relatively quickly,” Parsons explained. “Certain products like avocados can probably take a few weeks.
A quick warning from Trump's tariff trade group
Tariffs are imposed on Canadian crude oil imports, which could lead to a rise in gas prices. (Sven Hoppe/Picture Alliance via Getty Images/Getty Images)
Regarding energy prices, Parsons said the survey showed that gas prices could rise 70 cents as a result of tariffs on Canadian crude oil. He added that retaliation between the US and Canada could push it even higher.
“These tariffs target a wide range of goods, such as agriculture, so businesses have fewer adjustment margins, so consumers ultimately end up burdening the burden,” Tax Foundation senior economist Alex Durante told Fox Business. You'll be at a higher price.”
Durante added that the US could be considered an unreliable trading partner in the future given the threat of tariffs on Canada and Mexico. His first semester.
Click here to get a FOX business on the go
“When the US signs the USMCA, it is a commitment to not impose tariffs in violation of the contract, which means it is a further loss of credibility,” he explained. “So, I think not only will our economy deteriorate due to tariffs, but it will make it even more difficult for the US to negotiate future free trade agreements.”
