“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”
“The economic uncertainty created by Trump’s tariff threats has already warped markets and harmed the economy in ways large and small.”
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“Uncertainty created by Trump’s trade policies reduced aggregate U.S. investment by as much as $47 billion in 2018, according to a 2020 study in the Journal of Monetary Economics.
The authors of that paper wrote that “all measures suggest that uncertainty about trade policy has recently shot up to levels not seen since the 1970s.” They concluded that “both higher expected tariffs and increased uncertainty about future tariffs deters investment.””
“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.”
“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.
“The arrival of Elon Musk’s allies at the Labor Department has sparked fears that the quality of the agency’s reports on everything from inflation to jobs could suffer at the hands of inexperienced outsiders — with global consequences.”
“Trump tore up the North American trade deal that he’d signed (and praised as the “best agreement we’ve ever made”) just five years ago. He sent the stock market tumbling, forced the American automotive industry and other manufacturers to beg for mercy, and antagonized two of America’s biggest trading partners and allies. And after all that, he got virtually nothing in return.
Indeed, Canada’s and Mexico’s governments may have gotten more. Their leaders learned that Trump sees 10,000 as a big and significant number and that they can appease his tariff fever by promising to just keep doing what they already do—as long as they make it sound like he’s convinced them to change course.”
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“when Trump was asked directly by reporters on Saturday if there was anything Canada could do to avoid the tariffs, he said “nothing.” In various social media posts, Trump claimed first that the tariffs were intended to stop fentanyl from coming across the border And then, a day later, said they were meant to compel Canada to join the United States. Vice President J.D. Vance tried his hand at putting some random meats on this tangle of bones Sunday night, writing on X that Canada wasn’t keeping up with its NATO obligations.”
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“The leaders of Mexico and Canada effectively called the president’s bluff that there was nothing they could do to avoid tariffs. Facing the reality that tariffs would cause serious pain for American businesses—something that he even admitted last weekend (maybe he’s learning?)—Trump retreated, leaving the United States–Mexico–Canada Agreement in tatters and the relationship between America and two of its key allies strained.
We should be glad that Trump safely found an off-ramp after steering the United States recklessly into a potentially ugly situation, and we can hope that he did not cause too much long-term damage while getting there.”
“the U.S. is heavily reliant on Canadian crude oil to make liquid fuels and other petroleum products. Most U.S. refineries were built in the 1970s to accommodate heavy oil from the Middle East and Canada. This was well before the American shale boom, which brought lighter-grade oil to the market. In 2023, nearly 60 percent of crude imports came from Canada and July 2024 saw a record 4.3 million barrels of oil per day imported from the country.
“Canada is by far our largest supplier, and we build refineries specifically to refine heavier Canadian crude,” explains Nick Loris, the executive vice president of policy at C3 Solutions, a free market energy think tank. “Depending on the tariff rate and how long they’re in place, gas prices could rise anywhere from 10-30 cents per gallon, with the Midwest and the Rocky Mountain Region getting hit the hardest,” Loris tells Reason.”
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“tariffs could also harm American nuclear power. Despite generating the most nuclear energy in the world, the U.S. relies on other nations for uranium to fuel its fleet. Canada is the largest supplier of raw uranium (27 percent of imports in 2022), followed by Kazakhstan (25 percent) and Russia (12 percent), the latter of which the U.S. depends on for roughly a quarter of its uranium enrichment needs.
With last year’s passage of a bill to ban imports of Russian uranium signed into law, Canada is primed to play an increasingly important role in America’s uranium supply. Tariffs would threaten this and could increase fuel costs for American nuclear power producers”