What Trump wants from trade tariffs | Economist explains
What Trump wants from trade tariffs | Economist explains
US President Donald Trump has fired the starting gun on what could turn into a global trade war.
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He is set to impose a 25% tariff on goods from Mexico and Canada, and 10% on imports from China.
And he’s warned the European Union it could be next.
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What Trump is doing is smart and strategic, the tariffs are not the only thing to pay attention to. It 1: Brings production back to the US. (Seen with Honda's investment on producing cars here and the new Chip manufacturing to be done on US soil) 2: Focus on securing the minerals and oil via Ukraine minerals agreement and opening sanctions on our own oil production (Allowing Chip manufacturing to be cheap and reducing imported oil needs). – Freeing us from reliance on bad trade deals. 3: With all these happening concurrently to lower the effect of increased tariffs. It is a bold move, but he has made a clear move in the direction of balancing what he is imposing vs. what is needed to have those impositions without great economic effects on everyday people. The strategy is upsetting for those outside of the US, as we become more independent on goods and services. For too long we have outsourced, and seen company after company move to other countries to produce the products, we use every day. The only real way to have increased tariffs on countries, is to not become reliant on the goods from those countries. This move does just that. Bolstering our economy, in ways people seem to overlook. Not only will we build and produce cheaper products for ourselves, but the consumer market we have is the largest in the world. Meaning when created here, it will sell for more as an export due to tariffs against US goods. Thus, generating a stronger economy. We also will become stronger in trade – as access to our market will depend lower tariffs on imports, to access the vast consumer market of the US. This has been something that has been needed for a long time.
Hope is not a strategy professor.
Basically its good for other countries in long term
starting from 0:34, the reporter reads the figures wrong
$5,000 billion became $5billion
$15,300 billion became $15.3billion
$24,900 billion became $24.9billion
so the reporter cannot read numbers …………………
"What Trump wants from Tariffs". Trump wants us consumers to pay these Tariffs to fund his TAX Cut extension for the Richest 5%. GOP wants to raise the Debt 4 Trillion to fund 4.5 Trillion tax cuts while slashing 2 Trillion from SS, Medicare, Medicaid and any other funding not deemed necessary and wasteful.
None of this is why Trump is imposing the tariffs. He never thought the tariffs were a good idea for bettering our economy. I literally have zero clue where this idea came from. The only reason he is imposing these tariffs is to leverage our economy on the fight of drugs and illegal immigration. He’s basically crashing our economy, therefore crashing the other countries economies 10x harder, so they are forced to listen to his demands. In no way, has he ever thought that this was going to be a good strategy for boosting our economy. He’s basically just playing “who can outlast who” and foreshadowing… it’ll be the US. And if you don’t believe what I’m saying here, then read this coming from the man himself ….
https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/
The expert man said nothing relevant 😂
Trumps tariffs from first term showed non of the things Mohamed said, he was just spouting Trump ideas. For instance US companies just put prices up rather than try to take market share.
Canada knows the States need our oil , natural gas and hydro . You don't buy those things just to be polite . I really don't know what the States offer to me that I can't live without . Natural resources TRUMP household items , all day every day . We will buy Honda instead of Hyundai . Canadian wines and spirits instead of California wine and Kentucky bourbon . I can shop non-American all day every day . We got this .
Tariffs will increase costs of finished goods and components used throughout US manufacturing. This will be an immediate and huge hike in inflation. To fight inflation the Fed will have to hike interest rates which will be wonderful for the billionaires but possibly take away the middle class. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..
Tariffs or no tariffs, Canadians stopped purchasing American goods! No more American soft drinks, no American retail stores, no Amazon! Bye America, Not Buy American!
Never tariff a raw materials nation like Canada.
CANADA imposed tariffs on the USA for years, even before Trump ran his first mandate:
DAIRY PRODUCTS:
1. MILK: 270%
2. CHEESE: 245%
3. BUTTER: 298%
OTHER AGRICULTURL PRODUCTS:
4. CHICKEN: 238%
5. SAUSAGES: 69.9%
6. BARLEY SEED: 57.8%
CANADA TARIFFS ON USA BEFORE TRUMP
INDUSTRIAL GOODS:
7. COPPER: 48%
8. ALUMINUM: 45%
9. STEEL: 25%
CONSUMER GOODS:
10. USA CARS 45%
11. TVs: 45%
12. EGGS: 163%
13. WHEATS 94%
14. BOVINE/ MEAT: 26.5%
SOURCE: GLOBALE AFFAIRS CANADA
Canada cannot survive as a country with EVEN trade with the USA.
Canada has to Ripoff the USA $200 Billion a year In trade Or you can't survive as a country.
Trump, said then you should become a state.
You only exist because USA.
so you might as well merge with USA.
It is like someone throwing a life preserver
and Refusing to take it because
I don't like you then you drown.
Your are your own worst enemy.
You merely exist cause of USA you then should join it.
What the wise man does in the beginning the foolish man does in the end.
How about countries stop trading with the US that should straighten the problem for Trump. The rest of us can trade with one another.
Sadly nazi conman trump and president musky will DESTROY ameriKKKa.
I always enjoy hearing. Pros like mr. Mohamed elarian.❤
Exploding Trumpflation. Exploding unemployment. Capitulating to Russia. He wants to to occupy Gaza and turn it into a Trump resort. He claims he is above the law like a petty tyrant. Trump is an absolute and unmitigated DISASTER for the USA.
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This has been the only intelligent conversation and understanding of the reason for US tarrifs
I am no economist, in fact I am a biologist. But, I have been a successful businessman and in my view this seems utter nonsens. I think that you can look at trade value all you want but you have to take into consideration net profits. Canada exports raw materials to the US which are transformed into more value-added products. These products are then sold domestically or are exported. So ultimately, does the US economy benefit (I mean does it make more net profit) than the Canadian economy regardless of trade deficit? Without some raw materials such as Canadian aluminium, the US economy will suffer enormesly. Let’s not forget global Canadian-based companies such as Rio Tinto can sell aluminium outside the US. Is this what the US really wants? Final thought: I think that we are starting to see a disconnect between the wish of private enterprises and micro-managing politicians in the US.
So initially President Trump told Canada & Mexico he would impose tariffs of 25% on all imports of goods from Canada & Mexico, except energy( oil, natural gas & electricity) from Canada which would be tariffed at 10%. China a received a 15% tariff on all goods. His reason was fentanyl & illegal immigrants entering the USA from Canada & Mexico and fentanyl entering the USA from China.
Those tariffs on Canada & Mexico were then stayed for 30 days as both Canada & Mexico were taking action on fentanyl & illegal entry of people. Tariffs on China's goods remained. China is not telling Trump what he wants to hear, that they would take immediate action on fentanyl being shipped from China to the USA.
This is President Trump's style of negotiating to get the results he wants. He wants quick action. He could ask Canada & Mexico politely to take more action on these issues. But Canada and Mexico would be slow to react. Nothing gets done quickly in Canada & Mexico. Lighting a fire under the asses of both countries gets action more quickly.
The motive is a good one as fentanyl is a problem in the USA, Mexico and Canada. Thousands of people are addicted and dying. Especially youth. As far as illegal entry there is not much coming from Canada, about 1% of illegals enter the US from Canada. However, Canada needs to protect its borders from illegal entry from the USA to Canada. So it would be smart for Canada to take action, especially as the Trump administration is going after illegals in the USA.
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Less consumption & waste by people…income to USA traceries..increase GST & income’s tax at higher income too…suggesting…
Tariffs HELP Canada…. The Tariff Ripple Effect: How U.S. Tariffs on China Increased Supply to Canada and Mexico
When the United States imposed a 10% tariff on Chinese imports, it inadvertently triggered a classic supply reallocation effect—one that, counterintuitively, benefited neighboring markets like Canada and Mexico.
The Simple Bubble Gum Analogy
Imagine a neighborhood where one convenience store—let's call it "Big USA Mart"—buys all of its bubble gum from a single supplier, "China Gum Co." One day, Big USA Mart slaps a hefty surcharge on every pack of gum from China. Suddenly, buying that gum becomes 10% more expensive for American customers.
What happens next? The supplier, China Gum Co., is sitting on the same massive inventory, but now a major buyer (Big USA Mart) is ordering less. Faced with the choice of either letting the gum go stale or finding new customers, China Gum Co. starts shipping its surplus stock at lower prices to the smaller shops in the neighborhood—"Canada Mart" and "Mexico Mart."
The Real-World Effect: U.S. Tariffs Create an Oversupply Elsewhere
This is precisely what happened when the U.S. imposed tariffs on Chinese goods. The fundamental mechanisms of global trade ensure that when one major importer reduces its intake due to artificial price hikes (tariffs), the original supplier—China—seeks alternative buyers to offload its surplus. With excess stock flooding into Canada and Mexico, basic supply-and-demand principles kick in:
More supply means lower prices. Chinese exporters, eager to maintain revenue streams, offer discounts to non-U.S. buyers.
Canada and Mexico become preferred destinations. Since these countries did not impose tariffs, they became prime recipients of redirected Chinese exports at bargain rates.
Local distributors and retailers in Canada and Mexico gain pricing power. With an unexpected surplus, businesses in these countries have stronger negotiating leverage, further driving prices down for consumers.
Empirical Evidence & Trade Patterns
Historically, trade distortions caused by tariffs create asymmetries in global supply chains. A similar pattern emerged when the U.S. imposed steel tariffs—Europe and Asia saw steel prices drop due to redirected excess supply. In this case, China, unable to ship as much to the U.S. without incurring additional costs, aggressively rerouted goods to Canada and Mexico, increasing availability and reducing prices.
Conclusion: Tariffs Reshape, Not Halt, Trade
While the intent of U.S. tariffs was to penalize Chinese imports and boost domestic industry, the unintended consequence was an economic windfall for Canada and Mexico. By diverting supply, the U.S. tariff structure artificially inflated availability in its neighboring markets, creating lower consumer prices in those countries. Thus, through the simplest of economic mechanics—when a buyer steps back, sellers look elsewhere—American policy inadvertently made life cheaper for Canadian and Mexican consumers.
The anticipated surplus of commodities such as bananas, tomatoes, beer, and tequila—resulting from a potential 35% tariff imposed by the United States on Mexican and Canadian imports—will likely mitigate the economic disruption often exaggerated by alarmist rhetoric. Historical precedent demonstrates that Canada has successfully navigated similar trade realignments with resilience.
That said, Canada must not only meet but exceed its NATO commitments, given the geopolitical reality that Russia exerts undue influence over American media narratives, particularly through Fox News. With the United States teetering on the brink of systemic instability, evidenced by its escalating internal divisions, Canada must fortify its strategic autonomy and economic positioning to prepare for the repercussions of this unfolding geopolitical shift.
It would work if you guys weren’t a consumer country 😂
This is a negotiation tactic , to get what Trump wants and it's working. Mexico and Canada folded for a 1 month agreement.
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Unlike more than 100 years ago, the global supply chain is highly-integrated and co-dependent in 2025. Trump's tariff plan will absolutely derail our economy – currently the best in the world! There isn't enough US-based manufacturing to satisfy the demand American consumers have for every day goods – most of which come from outside the country. So, increasing the prices of China, Mexican and Canadian made products thru tariffs would only hurt every American because there are so few or NO domestic producers. It would take a decade or more for the US to create that kind of infrastructure and capability, assuming there's enough workers that want those jobs – which isn't a guarantee – especially with little appetite for even legal immigration by Republicans. Trump and Republicans had ways to address this issue in 2017 and failed. Instead of encouraging and financially incentivizing American companies to create this needed domestic manufacturing with tax incentives tied to large corporate investments, they simply cut EVERY company's federal tax without any strings attached. Republicans know there's no way to bring back US manufacturing without all three elements (Corporate Investment, Government Incentives & Accessible Immigrant Labor) working in harmony.