Re-elected President Donald J. Trump revealed in November his plans for imposing strict tariffs on various countries.
“On February 1, 2025, President Donald J. Trump signed executive orders imposing tariffs on almost all imports from Canada, Mexico and China,” reported Skadden.
These tariffs have been delayed and will not take effect until March 4, 2025 although the effects they may possibly ellicit still make them a prevalent topic of discussion.
Currently, for neighboring nations, President Trump wishes to impose 25% tariffs on Mexico and Canada (USMCA).
“The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020. The USMCA, which substituted the North America Free Trade Agreement (NAFTA) is a mutually beneficial win for North American workers, farmers, ranchers, and businesses. The Agreement creates more balanced, reciprocal trade supporting high-paying jobs for Americans and grow the North American economy,” according to the Office of the United States Trade Representative.
This agreement has thus far promoted free trade among the three nations, abolishing tariffs on a majority of goods and enforcing fair trade regulations.
“Our North American free-trade partnerships (no tariffs) mutually boosted our economies. Auto manufacturing is a great example of this. Free trade between the US, Canada, and Mexico led to a boom in car making and in jobs,” said Applied Global Leadership Chair, Mr. J.C. Moya.
Although indicated in certain circumstances, tariffs may be imposed. Therefore, Trump’s policy agenda to impose 25% tariffs on all imports from Canada and Mexico (except energy resources from Canada only receive 10% tariffs) is not against the USMCA if found to be justified under one of the circumstances.
For example, a circumstance tariffs may be imposed, as detailed in the USMCA, is for National Security Concern (Section 232 Tariffs), allowing a country to impose tariffs with the claim the imports threaten its national security. If President Trump utilizes this claim and it is found justified under the panel of USMCA’s dispute resolution system, then the tariffs are not considered an act against the USMCA agreement. President Trump has employed this claim for tariffs on steel and aluminum before.
Additionally, the tariff purpose is for “halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” according to the White House.
THE IMPACTS
How will tariffs impact everyone? Does this damage America’s relations with these countries? Should there be concern?
Mr. Juan Carlos Moya, AP Comparative Government/Political Science teacher and Applied Global Leadership moderator helps put into perspective the effects of these tariffs.
How Might these Tariffs Affect U.S. Relations with Key Allies and Trading Partners?
He says the tariff is dependent on which country one refers to. Concerning Canada, he says, “The Canadians have been one of our closest partners, and relations between our two countries have always been very friendly and productive. Think of pro-sports. Canadian teams are in the NBA and MLB, while the NHL has been an international league since its inception.”
Although, concerning China, he clarifies tariffs aren’t new to this relationship.
“Former President, Joe Biden imposed tariffs on China for clothing, solar panels, electric vehicles, syringes, steel, and other goods. Our relations with China are very competitive and becoming increasingly confrontational. I don’t think tariffs are going to change that,” said Mr. Moya.
How Might these Tariffs Impact America’s Global Reputation? Do they Signal Economic Strength and Assertiveness, or could they Create an Image of Unpredictability and Instability in U.S. Trade Policy?
“Of course, it hurts our reputation for being a steady ship in stormy seas. The world used to look to the U.S. for stability and solutions. At the moment, there is a breakdown in trust,” he said.
Since WWI, he explained, Canada has been a U.S. ally. Following 9/11, “Canada was the first to help.”
“Historically, tariffs have been ineffective and have led to economic downturns. In 1930 amid the Great Depression, tariffs were erected which ended up making the depression worse. Tariffs also contributed to the onset of WWI,” he said.
Conclusively, he shares that professional analysts and historians have discovered tariffs hurt economies and have not produced positive results in modern history.
Although, he does clarify “that Mexico and Canada are neighbors and partners; the situation with China is very different.”
What Potential Retaliatory Actions might Canada, Mexico, or China take in Response to these Tariffs?
He explains Canada is preparing their citizens for economic hardships and possibly boycotting American goods.
“Last week they were talking about retaliatory tariffs on imports of everything from wine and bourbon, fruits and fruit juices, including orange juice, vegetables, perfume, household appliances, furniture and sports equipment, along with materials like lumber and plastics…the list goes on. (By the way 30% of all of Florida’s OJ is exported to Canada. That’s a huge loss for Florida’s economy),” he said.
In summary, President Trump’s tariffs aimed towards preventing fentanyl and illegal immigration raise significant concern domestically and internationally. It is important to carefully analyze the anticipated benefits of protecting domestic industries with the broader economic consequences and the possible weakening of global relationships. A nuanced strategy that accounts for domestic economic wellbeing and preserving international alliances may be crucial in managing the complications of modern trade.
