Summary
Canadian Prime Minister Justin Trudeau announced retaliatory tariffs after Donald Trump confirmed 25% tariffs on Canadian goods and 10% on energy, set to take effect at 12:01 a.m. Tuesday.
Trump justified the move by linking it to fentanyl smuggling concerns.
Trudeau called the tariffs “unjustified” and imposed 25% tariffs on $155 billion in U.S. goods, with $30 billion effective immediately and the rest in 21 days.
He warned of price hikes and job losses in the U.S., arguing the move violates Trump’s own trade agreement from his last term.
Not an economic, but everything is entangled
Say you have two products: one from USA ($110) and the same from Canada ($100). Now we impose a tariff of 25 pct on the Canadian product ($125).
This means that consumers are going to buy the cheaper product, resulting in less income for the Canadian manufacturer.
The USA manufacturer can increase the price to $120, and still be cheaper than their Canadian counterpart. All while prices for customers are increasing
Unless there is no USA manufacturer, or there is but they don’t make nearly enough of the product to satisfy demand. More importantly, if the manufacturers we (USA) have buy much of the needed raw materials to make their products from Canada or other places with tariffs imposed, then a USA-made product becomes that much more expensive.
It’s stupid, and hard on everyone but the blame is entirely on trump. Canada (and hopefully Mexico) imposing retaliatory tariffs is basically the only way to get trump to back down. Like with MAD (mutually assured destruction), the assured part has to be there or it doesn’t work. Even though it causes pain to everyone, retaliation is the most effective way to end this madness sooner–it will hurt the US economy, raise prices, and turn trump’s supporters against him. The more it hurts, the sooner people will be out in the streets.