February 2 (UPI) — President Donald Trump stated Sunday that while there may be “some pain,” the “results will be spectacular,” one day after signing executive orders imposing tariffs on Canada, Mexico, and China in response to the fentanyl problem.
Trump’s directives will levy 25% duties on goods imported from Mexico and Canada, and 10% on Chinese imports. Canada’s energy exports to the United States face a 10% tariff instead.
On Sunday morning, he tweeted on Truth Social in all caps, “THIS WILL BE THE GOLDEN AGE OF AMERICA!” Will there be any pain? YES, MAYBE (OR NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL BE WORTH THE COST. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE – AND THE RESULTS WILL BE AMAZING!!!”
If Trump’s tariffs are enforced, the National Retail Federation estimates that each U.S. household will face an additional $7,600 in annual prices. They include the cost of automobiles, building materials, home furnishings, distilled alcohol, fresh food, and energy.
According to Mexico’s National Auto Parts Industry Association, tariffs impacting Canada and Mexico will force the average price of a car to jump by $3 million, while sales will decline by a million every year.
The group also warned that supply chains would be interrupted due to lack of commodities.
Canada and Mexico account for more than a quarter of all US imports.
Trump signed the three executive orders at his Mar-a-Lago private club in Florida.
Nations fight back
Canadian Prime Minister Justin Trudeau then imposed “25% trade tariffs on $155 billion worth of American goods.” Mexican President Claudia Sheinbaum announced that her country will pursue a “plan B,” which includes retaliatory tariffs.
According to Trudeau’s office, the leaders of both countries met on Saturday and “agreed to continue working together in areas of common interest and to enhance the strong bilateral relations between Canada and Mexico.”
Canada announced on Sunday a comprehensive list of things affected by its duties on $30 billion in American goods, including vegetables, wine, clothes, household appliances, equipment, and firearms.
China’s Ministry of Commerce announced Sunday that it will file a lawsuit with the World Trade Organization and “take corresponding countermeasures to safeguard its rights and interests.” The statement stated that the United States is “ineffective in solving its own problems,” including fentanyl use, while also undermining normal economic and trade relations between China and the United States.
The three countries are the US’s major trading partners.
In a lengthy post, Trump wrote: “The ‘Tariff Lobby,’ led by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continuing the decades-long RIPOFF OF AMERICA, both in terms of TRADE, CRIME, AND POISONOUS DRUGS that are allowed to freely flow into AMERICA. Those days are over! The United States has significant deficits with Canada, Mexico, and China (and practically all countries!), owes 36 trillion dollars, and will no longer be the “Stupid Country” MAKE YOUR PRODUCT IN THE USA, AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay only a fraction of what Americans spend for drugs and pharmaceuticals, for example?
During his inauguration speech on January 20, he referred to it as the “golden age of America.”
In a later post, he targeted Canada.
“We are paying hundreds of billions of dollars to subsidize Canada. Why? There’s no cause. We don’t need anything they have. We have unlimited energy, should build our own cars, and have more lumber than we can possibly consume. Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true! As a result, Canada should become our cherished 51st state. Much lower taxes, and far better military protection for the people of Canada – AND NO TARIFFS!”
Trudeau told Americans the tariffs “will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities.” And Canadians will need to be “checking the labels at the supermarket and picking Canadian products, opting for Canadian rye over Kentucky bourbon, or forgoing Florida orange juice altogether.
“It might mean changing your summer vacation with plans to staying here in Canada.”
Karoline Leavitt, White House Press Secretary, stated on Friday that tariffs might be beneficial:
“I think Americans who are concerned about increased prices should look at what President Trump did in his first term,” Leavitt told the crowd. “He effectively implemented tariffs and the average inflation rate during the first Trump administration was 1.9%.”
Vice President JD Vance commented on Fox News: “We still have, thank God, the biggest economy in the entire world, the best people and the best workers, but the message from President Trump to the entire world is very clear, we are done being taken advantage of, and we have a president who looks out for the interest of American citizens.”
Tariffs in the United States are collected by Customs and Border Protection officials at 328 ports of entry.
Trump has stated that tariffs will generate “trillions and trillions of dollars” from foreign nations.
However, international corporations are not responsible for paying the duties.
These additional costs can be passed on to customers. part U.S. corporations may bear part of the tariff costs. Tariffs could have a big impact on the cost of items sold in America. This includes vehicle parts, including those made in the United States, as well as food imported from Mexico.
Tariff proponents have suggested that levies can assist support domestic manufacturers by encouraging them to buy American-made products rather of freshly priced imports. Alternatively, companies such as automakers may decide to establish new plants in the United States.
“Come make your product in America,” Trump said virtually last week during the annual World Economic Forum meeting in Davos, Switzerland. “But if you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff.”
According to the Peterson Institute for International Economics, tariffs “have a poor track record” of reviving industry.
Some things, such as toys, apparel, and electronics, are not manufactured in the United States.
About 80% of toys imported into the United States are from China.
According to Capital Economics, the additional prices for products could cause inflation to rise from around 2.9% to as high as 4%, or roughly double the Federal Reserve’s objective of 2%.
According to its analysis from last week, “imposing any of these suggested tariffs would generate a rebound in consumer price inflation this year, taking it further above target and making it harder for the Fed to resume loosening monetary policy.”
The headline of a Wall Street Journal editorial on Saturday was “The Dumbest Trade War in History.”
“Mr. Trump’s justification for this economic assault on the neighbors makes no sense,” according to the newspaper.
It added: “Drugs may be an excuse because Mr. Trump has made it clear that he likes tariffs for their own sake,” referring to Trump’s remarks on Thursday that the US does not require oil or lumber from its neighbors.
“Mr. Trump sometimes sounds as if the US shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home,” according to the editorial. “This is called autarky, and it isn’t the world we live in, or one that we should want to live in, as Mr. Trump may soon find out.”
Larry Summers, Treasury Secretary under President Bill Clinton, termed the looming tariffs as a “self-inflicted supply shock.”
“We are charging foreign suppliers, so there will be less supply. “That will result in higher prices and lower quantities,” Summers told CNN. “This is a self-inflicted wound on the American economy.” I expect inflation to rise during the next three or four months as a result of the fee on things that consumers buy.”
Last Monday, Jamie Dimon, CEO of JP Morgan, the world’s largest bank, stated that tariffs are either “an economic tool” or “an economic weapon,” depending on how they are applied.
Dimon told CNBC: “I would put it in perspective: if it’s a little inflationary, but it’s beneficial for national security, then so be it. “I mean, get over it.”
According to CNBC, other company leaders were generally critical of the measures.
The National Retail Federation’s executive vice president of government relations, David French, stated, “Imposing steep tariffs with three of our closest trading partners is a serious step, and we strongly encourage all parties to continue negotiating with the appropriate seriousness to avoid shifting the costs of shared policy failures onto the backs of American families, workers, and small businesses.”
The president of the United Auto Workers Union, Shawn Fain, stated, “We do not support using factory workers as pawns in a fight over immigration or drug policy.” We are willing to support the Trump administration’s use of tariffs to prevent factory closures and limit the influence of firms that pit American workers against those from other nations.
“But so far, Trump’s anti-worker policy at home, including dissolving collective bargaining agreements and gutting the National Labor Relations Board, leaves American workers facing worsening wages and working conditions.”
Jay Timmons, president and CEO of the National Association of Manufacturers, stated that a “25% tariff on Canada and Mexico threatens to upend the very supply chains that have made US manufacturing more competitive globally.”
“The ripple effects will be severe, especially for small and medium-sized enterprises who lack the flexibility and cash to quickly find new suppliers or absorb rising energy costs.
“These businesses, which employ millions of American people, will see huge disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, hurting our capacity to sell our products at competitive prices and jeopardizing American employment.”