On Monday, president-elect Donald Trump made good on one of his central campaign promises by announcing plans to impose new tariffs on Mexico, Canada and China. Three weeks after winning the election, the former president vowed to impose a 25 percent tariff on all goods coming to the United States from Mexico and Canada and an additional 10 percent tariff on all imports from China on the day he takes office.
As he did previously, Trump is using tariffs not as way to protect domestic production but as political leverage. In case of Mexico and Canada he announced that the tariffs would stay in place until both countries stop drugs and illegal immigrants from "pouring" into the U.S., something he claims they could easily do. The additional tariff on Chinese goods hinges on the Chinese government's willingness to crack down on drug production and trade, as China has been found to be the primary source of fentanyl precursors.
According to the U.S. Census Bureau, Mexico, China and Canada are the three most important import partners of the United States, accounting for more than 40 percent of the country's imports last year. Raising across-the-board tariffs on all goods from these countries would not only hurt U.S. consumers, who would likely end up paying higher prices, but also businesses, who rely on critical inputs from China, Canada and Mexico and would have to re-think their entire supply chain.
