US President Donald Trump is set to impose fresh tariffs on China, Canada and Mexico on February 1. But how will it affect the US economy and those of the three countries.
Though Trump had pledged to levy up to 60 per cent tariffs on China during his election campaign, he later toned down his threats. White House press secretary Karoline Leavitt said the tariffs would amount to 10 per cent on China and 25 per cent on its neighbouring countries.
PRESIDENT TRUMP: "I had almost no inflation and yet I charged hundreds of millions of dollars of tariffs to countries... I had almost no inflation and took in $600M from other countries. Tariffs don't cause inflation. They cause success." pic.twitter.com/haw8rWlWPr
— Rapid Response 47 (@RapidResponse47) January 31, 2025
The moves comes amid trade deficit with the neighbouring countries as well as in responsed to "illagal fentanyl" that is coming from these countries.
China, Canada and Mexico together account for 40 per cent of US imports. The fresh tariffs have raised concerns about a possible trade war with these countries.
Trump said he will impose tariffs on the European Union in the future for not treating the US well.
However, economists believe that the steep tariffs could lead to inflation and slow down US economy. This would in turn affect the US working class, businesses, farmers and the consumers in general.
Experts pointed out that if inflations soars, consumers would be left with little money to buy goods and services, further hurting consumer-centric businesses.
According to S&P Global Mobility, 20 per cent of cars and light trucks imported by the US are manufactured in Canada and Mexico. Moreover, US also imports billions of dollars worth of auto parts from the two neighbours.
