Skip Navigation
world World News @lemmy.world
MicroWave @lemmy.world

Trump says Canada and Mexico to be hit with 25% tariffs on Saturday

Summary

Trump announced that 25% tariffs on imports from Canada and Mexico will take effect on February 1, though a decision on including oil remains pending.

He justified the move by citing undocumented migration, fentanyl trafficking, and trade deficits.

Trump also hinted at new tariffs on China.

Canada and Mexico plan retaliatory measures while seeking to address U.S. concerns.

If oil imports are taxed, it could raise costs for businesses and consumers, potentially contradicting Trump's pledge to reduce living expenses.

192 comments

  • If you are a non-Trump voter in a red state, especially if you work for the flagship company or industry in that state, I would like to apologize on behalf of all Canadians for what our government is about to do. We don't want to do it but it is the only way to deal with a bully.

  • I do ultimately think tariffs will be good for the US. I feel bad for other countries I guess, but I think the US needs to be more productive.

    California, seen as a relatively "progressive" state, has a sales tax on everything, and pretty extreme sin taxes. A tariff is like a sales tax, and a sin tax on specific imports.

    • The way you increase productivity is via exports, not artificially increasing the cost of goods. A sin tax is when you want to stop people from doing things so you make it more expensive. If you want to increase American cement production, you subsidize production.
      Adding a tarrif to Canadian cement imports increases cost for imported cement, and encourages domestic producers to increase costs to match. If the competition just got 15% more expensive, there's no reason for me to not raise my prices 14%.
      If the government comes in and says they'll pay me $15/ton of cement I produce, that encourages me to produce more cement and lower the price to sell it. Now I'm producing more, and I need to hire another machine operator and the economy grows because the lowered cost of cement makes people more willing to do things that need cement.

      Tariffs are really only good for counteracting other countries subsidies. If Canada were paying manufacturers $20 a ton to produce cement, then applying a $20/ton tarrif makes the prices unbiased.

      It's why our agricultural subsidies are viewed poorly by food scarce nations: we lower the overall market cost for food, and they can't afford to subsidize their own production, and returning equilibrium on imports would starve people, so they're trapped in a cycle of being dependent on imported subsidized food while living next to fallow farms.

      Canada and Mexico aren't subsidizing their export industries, and a lot of what we're trading is in things we can't or don't want to handle. You can't increase American uranium production, off the top of my head.

      We had a position of trade strength, which meant that we could afford to import more than we produced because our intangibles were worth more, and what we exported was worth more. Import steel and export tractors. Now we're saying we want to stop importing steel, making it harder to export tractors, so that we can bring back low paying dangerous jobs.

      If you want to see productivity grow trumps way, go get a job as a farmhand picking spinach. Because his policy is basically that we need less engineers and more farm hands.

      • I'm glad you started your dissertation with "the way you x is via y" because it immediately informed me that I was reading the work of an expert genius and as a smooth brain, when a genius writes, I read.

        One question, wouldn't higher prices on imported cements sort of make local cements automatically cheaper, giving them an advantage without asking them to cut corners? In a free market you will often see a "race to the bottom" on goods, whereby manufactures and producers will cut costs so low that they lose money, so long as there is some other incentives that would lead to profit. Video game consoles are a common example. The console is sold at a loss with the expectation that they will make up the difference on the consumables, games and related services.

        If local competitors can produce for lower cost than competitors it may drive more people, who generally just want to save money, to local businesses, creating demand, driving growth.

    • I think the problem is that these tariffs are, for the most part, untargeted. They aren't a "tax" on "specific imports". They're a blanket tax on all imports from many countries.

      • I thought it was targetted but again in California its all items sold are taxed and some at a higher rate.

  • I was going to give up eating this year anyway. Food just takes too long to buy, cook & eat.

  • If oil imports are taxed, it could raise costs for businesses and consumers, potentially contradicting Trump’s pledge to reduce living expenses.

    First time around, with the trade war with China, he had the federal government cut checks to affected farmers. I don't know the form that took, but during COVID-19, he had stimulus checks sent out -- with his name on them -- to the broader public.

    So, that's presumably to make sure that they associate him with the check. I understand that sending out gifts to the public with your name attached isn't uncommon around election in some countries with kinda sketchy political systems.

    One imagines that he might do a repeat. Most people don't seem to have a great handle on what drives inflation, from polls I've seen. If you figure that you get political points for sending out checks but don't lose as many political points for raising prices because people don't associate you strongly with those costs, that might be an advantageous political move; add tariff, which generates revenue to federal government, then send money to some approximation of impacted people with name attached. It's economically-inefficient, but...

    • Don't forget his little issue with TSMC holding a virtual monopoly on wafer fabrication.

      Don't forget that's HIS FAULT.

      GlobalFoundries had working 7nm, but they were a year late and-

      • Intel's problems appeared to be over (they weren't)
      • TSMC would have mass production of N7 up within months (they were already in risk production)
      • Samsung's aggressive posturing and pricing for Samsung Fab would eat into their business, even though it was for a 10nm class product
      • UMC would have 7nm up within 6 months (they stole TSMC IP and got clapped for it, no UMC 7nm)
      • SMIC would also be up within a year (Also stolen TSMC IP, they can't sell it in the west but it's used extensively in China)

      All those thing would make it hard to make a lot of money when they were a year late (though all of them turned out wrong except TSMC). SF parent company would have allowed all that to happen too, but then Trump started subsidising oil to put pressure on OPEC. ATIC no longer had their 'unlimited money' and GF had to get back in black, so 7nm was cancelled.

      This left only TSMC and Poor Quality Samsung (Intel still doesn't really do third party fab work)

      Thanks Trump for putting tariffs on for the mess you created.

192 comments