On Monday, President Donald Trump agreed to pause the process of imposing tariffs on Mexico and Canada for 30 days.
According to The Washington Post, Mexico and Canada both agreed to strengthen their efforts to stop drugs and migrants from crossing into the United States. The tariffs on Chinese goods went into effect on Tuesday, and as a result, U.S. postal services stopped receiving packages from China and Hong Kong until further notice.
On Friday, Trump announced that he would impose 25% tariffs on imports from Canada and Mexico and 10% on imports from China. These three countries are some of America’s largest trading partners, which will cause the prices of goods that U.S. consumers use to increase.
Prices on electronics, clothing, appliances, auto parts, and many other goods are expected to be affected. Many Americans also shop online from companies outside the U.S., like Shein, Temu and AliExpress, who may have to increase their prices due to the tariff threats.
Trump has stated that America could feel the “pain” of these tariffs that could trigger a trade war. During Trump’s campaign trail, he promised to lower prices and inflation, which has been an issue for many Americans. This may not be easy due to his new plan.
According to AP News, Consumer prices rose from 2.4% in November to 2.6% in December. Products in the food and energy departments increased 2.8% from last year. Many Americans have been spending more on certain goods after hearing about Trump’s plan to impose tariffs.
There are signs that inflation is starting to slow down, but that could quickly change with the new tariffs in place.
When asked how Trump will keep his promise of making inflation go down, the U.S. Security of Homeland Security Kristi Noem said, “If prices go up, it’s because of people’s reactions to America’s laws.” The main idea behind the tariffs is to keep immigrants and drugs from crossing the border.
In addition to the 25% tariff that Trump is imposing on Canada, he is also placing a 10% tax on oil, natural gas, and electricity. In turn, Canada is putting 25% tariffs on more than $155 billion of U.S. products. One-quarter of the oil Americans use daily comes from Canada, although Trump has claimed that the U.S. doesn’t need Canada.
Many companies and consumers are expecting to see a change in prices as well as production amid the tariff threats.