Donald Trump has revealed he’ll slap 25 percent tariffs on all goods coming into the US from Canada and Mexico. The move will have effects on both sides of both borders. In particular, Trump tariffs will spike the cost of imported foods in the US…
The president-elect has warned for months that he’ll wield his ‘America First’ stamp like a hammer starting Day 1 of his reign. And the most visible of those moves will be on immigration and imports…
Canada and Mexico hardest hit?
Yes, there will be serious ‘hits’ to Canadian and Mexican food exports to the US when the tariffs come into effect. Canadian and Mexican growers and producers who sell into the massive export market to the US will be placed at a punishing disadvantage compared to US producers of the same products.
And that will come as a shame as well a shock to folks on both sides of the border. Canada and the US have shared a traditionally-close and warm trade relationship for decades. Mexico is also huge trade partner with the US – not only in the food sector but in manufactured goods including cars and household appliances.
The first question everybody is asking about the new tariffs is, “Why so high?” There’s apparently a ‘retribution’ angle.
Other countries are being hit with a general 10 percent tariff blanket. Which apparently means Trump is adding an additional 10 percent to any existing import charges on their goods. And charging at least 10 percent on any goods imported from them that were not previously subject to tariffs.
It’s about ‘crime and drugs’
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridi-culous Open Borders,” Trump posted on his Truth Social platform. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
Clearly, the move is mainly directed at Mexico, shifting the blame – as Trump so loves to do – to the other party for anything bad that happens between the US and another party.
Immigration and border claims
‘Illegal immigration’ from Canada to the US makes up a vanishingly small portion of overall migrant border crossings into the US. And existing trade agreements had controlled ‘loss of American jobs’ to Canada to everyone’s satisfaction before Trump’s election victory.
But now, Trump is not only accusing Mexico of ‘stealing’ US jobs. He’s claiming Mexico is in co-hoots with China to steal even more than before. And to ‘dump’ cheap Chinese parts into North America.
Drug trafficing
The incoming US president’s popularity is also riding high on his promises to cut off the flow of illegal drugs coming into his country. On this account, it appears Canada must take a much larger part of the ‘blame’, for billion of dollars worth of opiates and Fentanyl that come into the US after landing on Canada’s east and west coasts. To Canada’s credit, our authorities have recently made several mammoth busts, breaking up at least two huge drug movement organizations here which were funneling Chinese-origin drugs across America’s northern border.
The food situation
Canadians and Mexicans won’t have to pay more for US food products coming into those countries. But their producers will be hit by dramatic reduction in demand from the traditional US buyers.
For example… The Canadian Province of Québec produces 80 percent of the world’s maple syrup. (Sorry, Vermont, but it’s true…) And the price of Canadian syrup, on which the US largely relys to fill its gaping, hungry maw, will jump at least 25 percent immediately.
But there’s another dynamic at play: Canadian Maple suppliers will suffer a dramatic drop in sales. Coupled with the self-imposed supply management price support system in Québec, run by the producers themselves, the humongous syrup surplus there will balloon even larger. At some point, that will cause the price to plummet, costing producers dearly.
There’s a similar though simpler supply-and-demand dynamic at play with Mexico. Many Americans don’t realize that domestic production of some everyday produce items doesn’t come clome to satisfying the US retail demand. The best example there might be avocados…
They’ve been aggressively marketed to the US by the so-called Mexican avocado cartel which, similarly to the Québec Maple Syrup group, controls production and prices. In fact, the US is now a net importer of avocados. Addicted as northerners have become to Avocado salads, avocado toast and – most crucially – Guacamole, there’s a real crisis looming.
And those examples are just two of thousands I could cite…
My take
Canada and Mexico won’t be the only foreign trading partners serious affected by Trump’s tariffs. Coffee and cocoa producing nations in Central and South America, and Africa will be hammered by flagging exports. And their economies are shaky enough as it is. The other side of that coin is, US coffee and chocolate lovers will have to pay that much more for their fixes. And prices on thosehich have already soared in cost over the last 5 years. Vital global commodities such as rice and vegetable oils will also be affected noticably if not dramatically.
It’s not just prices. American food chain partners will just stop bringing in foreign-origin products that aren’t selling profitably anymore. Look for reductions in selection in all aisles of the super-market. At the very least, there will be temporary shortages.
One hidden, long-term danger of Trump’s tariffs is that he’s making other countries who used to be friendly with the US less friendly. And some of them might turn to Russia, the EU and the BRICS alliance as markets for their goods. If and when the Trump tariffs come off, somewhere down the line, those former friends might have comfortably realigned themselves. And the US will have to work all the harder to win them back.
No matter how you look at it, Trump’s tariffs are poised to cause a lot of damage to US world rela-tions, and disrupt the global economy for years – maybe decades – to come…
~ Maggie J.