“Part of his administration’s solution to the high price of eggs? More imports. As part of a $1 billion plan to combat the bird flu, the U.S. Department of Agriculture (USDA) announced..that it would seek to expand imports of eggs”
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“A sudden constraint on supply—in this case, the bird flu—has pushed prices higher, and finding alternative suppliers might help ease the pain.
Now, someone in the White House might want to apply that same analysis to Trump’s plan for more tariffs on two of America’s biggest food suppliers.
Trump backed down from his threats to slap 25 percent tariffs on all imports from Canada and Mexico earlier this month, but at the time, he said those tariffs were merely delayed by 30 days.”
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“Canada and Mexico accounted for 28 percent of all imports to the U.S. last year. If the costs of Trump’s tariffs are fully passed down the supply chain, consumers could be facing $225 billion in higher costs, according to an estimate by the American Action Forum (AAF). The energy and manufacturing sectors figure to be the hardest hit, thanks to the deeply integrated North American supply chains for products ranging from crude oil to critical minerals like cobalt and zinc.
Food prices would likely rise too. The U.S. imports more food than ever before, Bloomberg noted this week, and many of those imports come from America’s two neighbors. Mexico is America’s largest source of agricultural imports, according to the USDA. That includes 63 percent of U.S. vegetable imports and 47 percent of U.S. fruit and nut imports. All of that would be affected by the new tariffs.”
“President Donald Trump pledged Thursday to enforce his planned 25 percent tariffs on Canada and Mexico starting March 4, after both were put on pause earlier this month.
“We cannot allow this scourge [of drugs] to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” Trump posted to Truth Social on Thursday morning.
Trump also promised to levy an additional 10 percent tariff on China starting the same date.”
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“Trump has already imposed 10 percent tariffs on China after the leaders were unable to stave off a deadline earlier this month”
“These tariffs will protect American steelmakers and aluminum manufacturers from competition but at the expense of other American manufacturers that buy steel and aluminum to produce finished goods.
Unfortunately, there are a lot more jobs in the latter camp than in the former.”
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“The Peterson Institute for International Economics calculated that the costs of Trump’s 2018 steel tariffs totaled about $650,000 per job created. If this is an economic development scheme for American manufacturing, it’s a pretty terrible one.
Farther downstream, consumers will be hurt too. When Trump hiked tariffs on steel and aluminum imports during his first term, those import duties translated into price increases of 2.4 percent for steel and 1.6 percent for aluminum, according to a 2023 study by the U.S. International Trade Commission.
That might not sound like a lot, but there are several reasons to expect a more significant hit this time around.
For one, Trump is now raising tariffs on both metals to 25 percent. His first-term tariffs were 25 percent on steel but only 10 percent on aluminum.
The impact of the steel and aluminum tariffs imposed during Trump’s first term was also blunted by the wide variety of carve-outs and loopholes that the administration created. Companies affected by the tariffs could apply for exemptions—and the process for deciding who got those breaks was, unsurprisingly, opaque and political.”
“The U.S. is the second-largest steel importer in the world, according to the International Trade Administration. In 2023, the U.S. imported 25.6 million metric tons of steel and exported a little more than 8.2 million metric tons. About half of the aluminum used domestically is imported and by global standards, the U.S. has a very small aluminum smelting industry. Steel and aluminum imports to the U.S. were valued at nearly $50 billion in 2024, per Bloomberg.”
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“Imposing levies on steel and aluminum will increase costs for domestic energy projects (which will be passed on to consumers) while hamstringing America’s energy dominance. In recent years, high material costs (and burdensome regulations) have led to cancellations or price tag hikes for offshore wind energy, advanced nuclear power, and transmission line projects. Instead of building oil pipelines to the U.S., these trade barriers could also incentivize Canadian energy companies to invest in other markets, such as Japan, says Wayne Winegarden, an economist at the Pacific Research Institute, a free market think tank. “This really is one of the dumbest things we could be doing,” Winegarden tells Reason.
Importantly, these tariffs won’t accomplish Trump’s stated goal of “making America rich again.”
A study from the International Trade Commission found tariffs on steel (25 percent) and aluminum (10 percent) implemented during the first Trump administration decreased production and increased costs in downstream industries that use these materials by 0.6 percent and 0.2 percent, respectively. Total production in downstream industries was $3.5 billion less in 2021 because of these tariffs. The Tax Foundation estimates that repealing tariffs and their quotas would increase long-run gross domestic product by $3.5 billion and create thousands of jobs.”
“If the White House’s preliminary assessment is accurate, it would be the largest tax increase on Americans since World War II—and one that Trump would apparently seek to implement without congressional approval.
The specifics of Trump’s reciprocal tariffs plan remain sparse. The executive order Trump signed Thursday instructed the Department of Commerce and the U.S. Trade Representative to develop new proposed tariff levels that take into account the tariffs charged by other countries to import American goods, as well as industrial subsidies, value-added taxes, and other economic policies that Trump views as unfair. It will take weeks (and perhaps longer) for the new tariffs to be calculated and rolled out, and the changes may be implemented on a country-by-country basis, according to Megan Cassella, a reporter for CNBC.”
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“The direct costs of taxes on so many imports would be only part of the problem. Trump’s idea of charging different tariffs on every country’s exports means the same product could be charged wildly different tax rates depending on where it was sourced. Those tariff rates would also be subject to constant fluctuation, as other countries shift their policies—as many will likely do in response to Trump’s new tariffs. That’s a recipe for not only higher taxes on American businesses that rely upon imports but also a constant state of uncertainty.”
“President Donald Trump on Thursday signed his plan for reciprocal tariffs but delayed their implementation as his administration launches negotiations on a one-by-one basis with nations that could be impacted.
“The Plan shall ensure comprehensive fairness and balance across the international trading system,” read the memorandum signed by Trump.
The studies of each country could be completed by April 1, incoming Commerce Secretary Howard Lutnick said Thursday while standing at Trump’s side, adding that then “we’ll hand the president the opportunity” to start implementing them as soon as on April 2.”
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“Nations from India to Brazil to South Korea have long charged higher average duties on various goods and will clearly be in the middle of coming talks.
Trump’s memo Thursday outlined how non-tariff barriers, such as the VAT, would also be subject to reciprocity.
“For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” Trump posted to Truth Social on Thursday.
That issue is likely to be a sizable stumbling block in relations with the European Union.”
LC: VATs are applied to domestic products and imports, so treating a VAT like an import tariff that is just applied to the import, makes no sense.
“None of this will do much to stop “dangerous narcotics” from entering the United States, which is Trump’s avowed goal. Interdiction efforts are doomed by the economics of drug prohibition, a challenge that is compounded by fentanyl’s potency, which allows traffickers to distribute large numbers of doses in small packages by land or mail. And Mexican cartels are already working on domestic production of fentanyl precursors in case shipments from China are curtailed. Despite those realities, Trump can still falsely claim he is winning the war on drugs by citing misleading metrics.
Trump said the tariffs would remain in place until the targeted countries took “adequate steps to alleviate the opioid crisis.” Since that criterion is deliberately vague, Trump can simply declare that whatever Mexico, Canada, and China agree to do is “adequate.”
In case that seems too slippery, Trump could cite drug seizure numbers as proof of his success. The beauty of this approach is that Trump can claim victory no matter which way the numbers go.
Given Trump’s promise to “seal the border,” you might expect U.S. drug seizures to go up. But he has previously argued that increased seizures are a sign of failure rather than success.”
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“Unlike “adequate steps” and drug seizure numbers, overdose deaths are a clear measure of whether the “opioid crisis” is getting better or worse. The good news is that drug-related deaths fell precipitously last year after climbing nearly every year for more than two decades. According to preliminary CDC estimates, the death toll during the year ending last August was about 22 percent lower than the total for the previous year—by far the biggest such drop ever recorded.
Inconveniently for Trump, that dramatic decrease happened on Biden’s watch, and there is little reason to think interdiction had anything to do with it. So even if the apparent turnaround continues this year, attributing it to Trump’s tariff-assisted war on drugs would be highly implausible. We can nevertheless expect that Trump will do just that.”
“The annual number of drug-related deaths in the United States rose by 44 percent between 2016 and the last year of his first term. Now Trump blames foreign officials for his failure”
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“As The New York Times reported in December, Mexican cartels already have a backup plan. They are recruiting “chemistry students studying at Mexican universities” to synthesize fentanyl precursors, “freeing them from having to import those raw materials from China.”
Trump thinks the Mexican and Canadian governments could do more to shut down fentanyl manufacturing within their countries. But to the extent they succeeded in doing that, production would simply shift elsewhere, as has happened repeatedly with drugs such as cocaine, heroin, and methamphetamine.”
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“Mexican drug cartels “move illicit fentanyl into the United States, primarily across the southwestern border, often in passenger vehicles,” the CRS noted. “The U.S.
Department of Homeland Security asserts that 90% of [seized] fentanyl is interdicted at ports of entry, often in vehicles driven by U.S. citizens. A primary challenge for both
Mexican and U.S. officials charged with stopping the fentanyl flow is that [the cartels] can meet U.S. demand with a relatively small amount.””
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“Fentanyl also enters the United States by mail, and it is not feasible to intercept all of those shipments, especially given their small size and the enormous volume of packages.”
“The International Emergency Economic Powers Act, passed in 1977, grants the president broad authority over economic transactions, and a wide range of abilities to deal with “any unusual and extraordinary threat,” stemming in whole or in part from foreign sources.
Presidents, including Trump’s predecessor Joe Biden, have used the law to impose economic sanctions on other countries, including on Russia after it launched its 2022 war on Ukraine.
But the closest a president has come to citing a national emergency to impose tariffs was when President Richard Nixon used a different law — the Trading with the Enemy Act of 1917 — to levy a temporary universal tariff on all imports in 1971.
Trump justified his new tariffs Saturday by pointing to “the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” which he claims Mexico, Canada and China are not doing enough to keep from coming into the United States.
But Bill Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies, said Trump’s use of IEEPA to justify his trade actions “doesn’t really pass the red-face test,” setting the stage for a company or trade association whose members have been harmed by the action to sue.
“The question will be, can you find a judge who will write an injunction to stay the tariffs from going into effect,” Reinsch said. “And my prediction is that will be hard, because you’re asking a federal judge to essentially say, ‘I know more than the President does about what an emergency is.’ And I think judges are going to be reluctant to do that.”
That won’t stop a lawsuit from proceeding, most likely all the way to the Supreme Court, Reinsch said, but it could be years before there is a conclusion to the legal battle.
“The courts have historically upheld the president’s power to take emergency actions, especially when they are related to national security. But one important question is whether they will uphold the use of tariffs. In the past, [IEEPA] has only been used to impose sanctions,” said Tim Brightbill, a trade attorney at the law firm Wiley Rein in Washington, DC.
“While it is possible that companies or industry groups would seek an injunction, they probably face an uphill battle blocking the new tariffs,” Brightbill said.”
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“the U.S. effectively killed the WTO Appellate Body during Trump’s first term by blocking the appointment of new judges, leaving it without the ability to adjudicate disputes. And there’s little to suggest the Trump administration would abide by a WTO ruling even if the organization were able to issue one.”
Despite producing tons of oil, the U.S. still imports a lot of oil. The stuff we produce can’t be refined by our refineries, so we ship it out to be refined and import foreign oil to refine here.