March 10, 2025
President Donald Trump announced the U.S. would add 25% tariffs on imports from Mexico and some from Canada. But after both countries reportedly agreed to send thousands of their own troops to U.S. borders to help stop illegal immigration and the flow of illicit drugs, the tariffs were paused with both countries.
And then there’s China. Trump announced an additional 10% tariff on Chinese imports because Chinese officials have failed to stem the flow of chemicals to known criminal cartels.
So, it seems the president’s threatening tariffs are a negotiating tactic to get concessions on other matters. But we’re at the point where they’re beginning to have real, potentially inflationary consequences.
Tariffs raise costs for companies doing the importing. With China, American businesses must pay Uncle Sam more to import the same goods from the world’s second largest economy. Cell phones, other electronics, toys, appliances, and more are among the biggest Chinese exports to the U.S.
Quite often, tariffs mean higher consumer prices because companies just pass the extra costs on.
Countries react too. China responded with 15% tariffs on some American exports, as well as export controls to the U.S. China said it would implement a 15% tariff on coal and natural gas products, as well as a 10% tariff on crude oil, agricultural machinery, and large-engine cars imported from us.
Alas, the trade wars return.
In his first term, President Trump repeatedly raised tariffs on Chinese goods. China responded each time, and a full-blown trade war escalated. Are we in for another round of this fighting? It seems so.