President Donald Trump has announced that the U.S. will be charging tariffs for products entering the country from Mexico, Canada, and China. The tariffs went into effect on Tuesday. A tariff is a fee one country charges for products entering the country from a different country. Let’s say a product is entering the U.S. from Mexico. The U.S. will charge a fee to let it in. This increases the cost of products for Americans to buy. According to CNN, “Specifically, Bessent plans to start tariffs at 2.5% and gradually increase them, according to the Financial Times. But Trump told reporters on Air Force One Monday that he would reject that plan.”
Stated by NBC “President Trump imposed a 25% tariff on Mexican and Canadian goods, as well as an additional 10% tariff on Chinese imports.” The reasonfor the tariffs, the President said “ is the quantity of illegal narcotics, including fentanyl, which still pour into the U.S. through these countries, causing thousands of deaths.” Fentanyl is a highly addictive substance which causes thousands of overdose deaths in the U.S.
The Chinese goods tariff will be added to an already February-imposed tariff of 10%. The Chinese government, the president continued, hadn’t been working hard enough to stop the flow of fentanyl. The president also complained Mexico and Canada hadn’t made satisfactory progress in stopping the problem. “tariff was the fourth-most beautiful word in the dictionary, behind God, love and religion,” said President Trump on CNN.
Raising the price of Chinese goods is meant to pressure China to agree to more favorable trade deals with the U.S. In the last month, the White House released a report accusing China of using U.S. investment to acquire technology and bolster its military. The U.S. is also looking into whether Chinese companies operating in the American markets are operating by the rules. They can be pushed out of the American market if not, which can be highly impactful economically.
The tariffs will negatively impact the Chinese economy as well as the American economy. The Chinese economy is already facing a housing crisis with low demand for products. The U.S. is facing high costs with increasing interest rates. The President, despite the danger, feels the tariffs are worth it in order to level the playing field as well as combat the drug issue.
Canadian and Mexican officials are negotiating with the Trump administration in a bid to avert the new tariffs, which may be harmful to the economy in the region since the three countries are trade-interdependent. In Mexico, officials are considering other measures to slash Chinese low-cost imports, while in Canada, officials believe they have made significant strides in protecting their border and curbing drug trafficking in an effort to be able to circumvent the tariffs. This is the latest in a series of actions by President Trump to urge other countries to keep the fatal drugs out of the U.S.
