Donald Trump’s trade tariff on Canada, Mexico and China explained blindly. Explanation news

The United States on Monday postponed 25 percent tariffs on Canadian and Mexican imports in a month after an 11th hour call between Canadian and Mexico President Donald Trump and leaders.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Shinbam agreed to promote border security to prevent drugs and smuggling of migrants in the US, which was now facing a business war for now.

But 10 percent of tariffs on Chinese goods made effective by attracting retaliation measures from Beijing on Tuesday. Between 2017 and 2021, Chinese goods have already been done under the previous tariff to begin in Trump’s first term.

Tariff war by the US, the second largest goods trader in the world after China, has provoked markets worldwide. From January to November 2024, the value of goods traded between the US and the world reached $ 4.88 trillion, with $ 2.98 trillion in exports and $ 1.90 trillion in imports.

The United States’s top trading partners – Mexico, Canada and China – do more than 40 percent of the total goods, which cost more than $ 2 trillion.

What are tariffs and how do they work?

A tariff is tax levied by a government on imported goods and services, which is paid by businesses bringing them to the country. Designed to protect domestic industries, tariffs often increase the cost to consumers to reduce foreign products more expensive, potentially reduce demand.

For example:

• A Chinese exporter sells a pair of jeans to an American importer for $ 10.
• The US government imposes 10 percent tariffs on Chinese products.
• The American importer will now have to pay an additional $ 1 additional to the federal government for jeans, causing its cost to $ 11.
• After adding expenses and profit, jeans will be sold in $ 20.
• American consumer will probably pay more for jeans.

What does a break on tariffs in Canada and Mexico mean?

After a conversation with Trump, both Mexican President Shinbam and Canadian Prime Minister Trudeau made commitments for security with the US on their shared borders.

“I only spoke with the President of Mexico Claudia Shinbam. It was a very friendly conversation in which she immediately agreed to supply 10,000 Mexican troops on the separation border of Mexico and the United States, ”Trump wrote on the truth on Monday.

After his call with Trump, Trudeau announced that Canada would proceed with its pre -mentioned $ 1.3 billion border plan, while appointing “Fantenal Caesar” and officially nominated Cartel as “terrorist” organizations Is committed to

“It’s very good news that Tariff has been stopped and Tariff has been stopped to join with Vina Nadjibulla, Vice President of Research and Strategy at Canada’s Asia Pacific Foundation and to join Canada to join Canada with Trump There is a need to make possible efforts. ” Jazeera.

“But beyond the immediate crisis, we need to work on structural issues that lead to this over-neutrality on America. We need to create the ability to export (at places other than us) and to invest in our competition, ”said Nadjibulla.

Are tariffs a new idea?

No, tariffs have been first used by many countries. Historically, in the US from 1790 to 1860, Tariff produced 90 percent of federal revenue.

Tariffs can also be used to “punish” a foreign producer of goods to not follow international trade practices. In 2018, the US began tariffs on hundreds of billions of Chinese goods, citing unfair trade practices and intellectual property theft. It marked the beginning of the US-China trade war, where items such as semiconductors, batteries and electronics were taxed on the washing machine.

The same year, Trump also introduced 25 percent levy on steel and 10 percent on aluminum, affecting several countries including Canada, Mexico, India, Brazil and Argentina.

Why is the tariff used?

Tariffs are often used to protect some domestic industries from foreign competitors. This is due to increasing the price of those imported goods. The perception behind the tariff is that buyers will choose domestic products on expensive foreign imports, which will help in growing domestic industry in turn. This is not always the case, however.

For example, for the US to produce avocados – 90 percent of which are imported from Mexico – a long and difficult achievement that Avocados is produced in only three states: California, Florida and Hawaii.

Why did Trump put a tariff?

During Trump’s President’s campaign, he promised to impose tariffs on America’s largest trading partners in vengeance, especially on the flow of migrants and drugs.

Trump also stressed on using tariffs as a means of encouraging foreign businesses to enhance domestic manufacturing and establish factories within the US sector.

Tariff is also used to generate revenue for a country, which is accompanied by additional income from taxes levied on imported goods being used for public expenses. For example, in 2019, according to the Bruckings Institution, from 2017, $ 79BN was born in revenue tariffs, twice the price from 2017. However, most of this burden was given to consumers who paid high prices.

“During the 2018-2020, President Trump mainly used Tariff as a bargaining chip,” Nadjibullah told Al Jazira. “This time, motivations seem widespread, including the desire to bring back more manufacturing in the US, move the tax burden away from the income tax and tariff, and use both tariffs as leverages and as punishment. We have been seen under Trump’s first term, we are looking at a very large scale. ,

Which products will be affected by tariffs?

Many goods will be greatly affected by Trump’s tariff. Depending on the most importing America from Canada, Mexico and China, it will include items such as car, fuel, computer and electrical equipment. Foods such as avocados are also likely to see an increase in price.

What are Trump planning to impose on Canada, Mexico and China?

Trump signed three executive orders holding 25 percent tariffs on all goods in Canada and Mexico, as well as 10 percent tariff on Canadian oil and additional 10 percent tariff on Chinese goods.

Canada is a large exporter of crude oil with 97 percent crude oil exports of crude oil going into the US in 2023, while Mexico exports large amounts of yields such as fruits and vegetables along with automobile parts.

China is a major exporter of electrical equipment and electronics including Chips, laptops and smartphones.

What are the anti -anti -counter tariffs?

Canada, Mexico and China have all said that they will react with anti -anti -tariffs. Trudeau said on Saturday that 25 percent of levy would be slapped on a group of US imports, which was later stopped.

Beijing criticized the latest tariff, stating that it would challenge the tariff in the inter -government body The World Trade Organization (WTO), stating that it would regulate international trade. China has a counter-tariff on US imports which will be applicable on 10 February.

What tariffs have already been imposed on China?

Under Section 301 of the US Trade Act of 1974, American trade representatives faced power to fight unfair trade practices abroad. It has been at the center of the Washington trade war with China since 2018 when Tariff was placed on the world’s largest exporter.

In an important step, the Biden administration expanded these tariffs in September 2024 to target items such as electric vehicles, batteries, semiconductors and solar panels, with levy between 25–100 percent.

Can tariffs cause a business war?

“It appears that there is a temporary break on tariffs against Mexico and Canada. However, the tariff on China is likely to be effective on February 4, and President Trump has indicated an additional tariff against the European Union and others. So yes, we can go to a business war, ”Nadjibulla told Al Jazira.

“In response, countries will possibly adopt a series of strategies – from direct vengeance to hedge their business relations between America, China and other partners. Globally, we can expect significant disruption for the effects of inflation and the supply of chains. ,

Will it increase inflation?

“Yes. Combining inflation pressure will give rise. “

What can consumers do to make security/plan for this?

“Where possible, buying local products and avoiding some imports can help consumers manage the rising costs,” Nadjibullah told Al Jazira.

But they cannot completely escape from inflation pressure starting with tariff war.

Will the prices of other items rise?

Yes, the cost of goods will increase in most cases. It is not only the final product goods, but also capital goods, which will increase production costs and result in high cost for final products. Additionally, the prices will increase prices through the high cost supply chain for raw materials and parts.

According to an analysis by Peterson Institute for International Economics (PIIE), an American-based non-profiting organizations researching the global economy, machinery and electronics will face the largest import tax-Given that they are mostly sour from China. And because they currently face low tariffs. Rate.

Other American imports of China will also include toys and sports equipment from the possibility of being the most difficult.

Who pays the price?

Finally consumer. US-based businesses will face paying high taxes. In most cases, the cost of tariffs is indirectly raised by consumers as there is a possibility of increasing the price of the above goods to manage taxes levied by importing businesses.

“Consumers will put a lot of burden through high prices, but businesses will also feel impact. Nadjibulla of Canada’s Asia Pacific Foundation said that industries such as Canadian and US auto sectors could be particularly hard-hit.

Can tariffs affect jobs?

In theory, more domestic production will be encouraged by applying tariffs, which, in turn, will require more employment. Similarly, if foreign companies are being encouraged to bring their factories to the United States, it will increase employment.

For example, Trump imposed 20–50 percent tariffs on the washing machine, bringing more jobs in two areas where the equipment was not first manufactured: Clarksville, Tennessee and Newbery, South Carolina.

In 2018, LG completed an investment in a new smart factory in Clarksville, which was laid with 700 employees. Similarly, in 2018, Samsung constructed a equipment manufacturing facility in Newberry, South Carolina, with 1,000 employees hired.

The US administration will expect the latest tariff war encourage corporations to establish more factories and businesses in the US.