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President-elect Donald Trump on Monday announced that he will impose new tariffs on goods from Canada, Mexico and China through on his first day back in the White House next year. The Republican's policy might send prices of several goods, including car parts and food grains, soaring. The 78-year-old said he would enact tariffs of 25% on all Canadian and Mexican goods and 10% on Chinese goods.
Trump said that the policy on Mexico and Canada 'will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!' Neither of the two countries have responded to the president-elect's announcement yet.
"On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders," Trump said in a post on Truth Social.
"Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!" he added. Canada, Mexico and China are the United States' largest trading partners.
A 25% tariff on all goods from Canada and Mexico would have widespread economic implications, impacting a range of goods imported into the US. Here is a breakdown of a potential price increases by category:
1. Automotive Industry
Canada and Mexico are key players in the North American auto supply chain. Parts, vehicles, and manufacturing components will become more expensive, resulting in a potential rise in prices for cars and trucks, especially models with parts sourced or assembled in these countries.
2. Agriculture and Food Products
Canada is a major supplier of dairy, wheat, maple syrup, and seafood like salmon and lobsters. Mexico provides large volumes of avocados, tomatoes, peppers, and other produce.
3. Energy Sector
Canada is a top exporter of crude oil and natural gas to the US. A rise in tarriff could impact costs for gasoline and heating.
4. Manufacturing and Raw Materials
Both countries supply essential metals – especially steel and aluminium – used in construction, packaging, and appliances. Canada is also a leading exporter of softwood lumber.
5. Consumer Electronics and Machinery
Many goods, including machinery, electronics, and appliances, involve parts manufactured in Canada or Mexico. A rise in tarrifs could result in higher costs for consumer electronics, industrial equipment, and appliances.
6. Apparel and Retail Goods
Some apparel and consumer goods are manufactured in Mexico for US retailers. A tariff rise could impact prices of cllothing, footwear, and retail goods.