Trump's new tariffs spark trade tension with key partners. We listed down the products affected by the change
President Donald Trump announced over the weekend that 25 per cent tariffs would be applied to goods imported from Mexico and Canada. An additional 10 percent duty will also be applied to products from China. So, which products are affected by the new charges?
White House spokesperson Karoline Leavitt confirmed that the new tariff rates took effect from Saturday, 1st February. She also mentioned that Donald Trump is considering an extra 10 per cent charge on all goods imported into the United States.
Goods affected by tariffs worth hundreds of billions of dollars
A 25 per cent tariff has been imposed on products from Canada. However, a lower rate applies to gas, electricity, and crude oil, where the tariff is set at 10 per cent. The value of crude oil imported by the USA from Canada last year amounted to nearly $100 billion.
Cars, alcohol, electronics
For products from Mexico, experts cited by AP highlight that the country is a major exporter of cars and car parts to the USA, with the market size reaching approximately $150 billion annually. The tariffs also affect alcohol. The import volume to the USA from Mexico is about $5 billion for popular tequila.
Conversely, China primarily supplies electronics to the USA, with a product value exceeding $130 billion. Tariffs have also affected imports of toys and sports equipment, exceeding $30 billion, furniture valued at $20 billion, and footwear valued at nearly $8 billion.
In response to the decision, Canada and Mexico quickly announced the introduction of their tariffs, while China stated that it would take "necessary countermeasures". What these will entail is yet to be determined.
Tariffs may cost the average consumer $2,400
According to estimates from ING, implementing all the tariffs announced by Trump could increase the annual expenses of an average American consumer by $2,400. Experts from Capital Economics predict that the effective tariff rate in the USA will rise from the current 2.4 per cent to 31 per cent, reaching its highest level in history.
Inflation could rise from 2.9 per cent to 4 per cent, double the Federal Reserve’s target. This level would match indicators from mid-2023 when the Fed maintained interest rates at their highest level in two decades.
Do tariffs harm the US economy?
Trump and his allies, including the new Treasury Secretary Scott Bessent, argue that "the tariffs introduced during Trump's first term did not contribute to rising inflation." However, economists from Capital Economics claim that the previous tariffs were too low to impact the economy significantly.
The Brookings Institution notes that previous tariffs benefitted American industry, such as creating 1,800 new jobs at Whirlpool and other companies producing washing machines. However, during Trump's first term, the overall number of jobs in the manufacturing sector fell from 12.4 million to 12.2 million. Moreover, the cost of creating those jobs was enormous.
