All indicators are that Trump is going to impose 25% tariffs on Canada and Mexico today. The chaos is part of the whole experience.
Anyway, a couple of interesting reads on this. First, the Bank of Canada has an article on the impact of tariffs, including the diagram above. Key points are that both countries will take a hit to GDP, inflation will probably grow, demand for products will fall, and unemployment will grow (due to loss of jobs due to lack of demand).
Economy Minister Marcelo Ebrard reiterated that tariffs on Mexican exports would have an adverse impact on consumers in the United States.
“You have to take into account … that Mexico is the main exporter [to the United States] of final goods such as cars, computers, televisions and refrigerators,” he told Sheinbaum’s press conference.
“… United States consumers would be affected” by the tariffs, Ebrard said.
“In first place because prices will be higher. The price of all those products will rise 25%,” he said.
Ebrard also said that a 25% tariff on Mexican exports would diminish the availability of Mexican-made (or grown) products in the United States, and that the duty could cause supply chain problems in a range of sectors including the auto industry.
The “main impact,” he stressed, is that “millions of families in the United States will have to pay 25% more” for a wide range of products including Mexican fruit, vegetables, meat and beer.
One of the reasons I bought a new truck at the end of last year was I was expecting Trump tariffs to add thousands to the cost of a vehicle. Well, here we are.