President Trump signed executive orders on Saturday who imposed major rates for the three largest trading partners in the country, a movement that runs the risk of unleashing a harmful trade war.
Trade wars were also a characteristic of the first term of Mr. Trump in the White House. But his last rates on Canada, Mexico and China, who will come into effect on Tuesday at 12:01 pm to come into effect, widens the scale of disturbances considerably. More than a third of the goods and services that are imported or purchased from the United States have been linked to the three countries, to support tens of millions of American jobs.
This is what about the expected fall -out of the rates:
How are sweeping the rates?
All goods imported from Canada and Mexico are subject to a rate of 25 percent, except for Canadian energy products, which according to the executive orders will be affected with a rate of 10 percent. The orders also placed a rate of 10 percent on Chinese goods.
The car and electrical equipment sectors in Mexico are most exposed to disruption of major rates, just like mineral processing in Canada, according to economists from S&P Global. In the United States there are the greatest risks for agricultural, fishing, metal and automatic production.
What should consumers expect?
American companies are likely to respond to rates in different ways. Some try to pass on the costs to their customers by increasing prices. Others can choose to eat the costs of the rate. Companies can also try to force foreign suppliers to bear the burden by negotiating lower prices for their products.
But when Mr. Trump imposed rates on China during his first term, economic studies showed that most of those costs were passed on to American consumers – a scenario that will probably play again. This can mean higher prices in the aisles of supermarkets, with car dealers and at the pump.
About 60 percent of the oil that comes from the United States from Canada. Rates for Canadian energy, although lower than for other imports, can still cause an increase in prices at the pump, especially in the midwest, where refineries change Canadian oil into fuels such as gasoline and diesel.
There is also concern about the inflatoidal pressure across the board. Analysts at Goldman Sachs have said that if Mr. Trump continues with rates across the board, this would increase both prices in the United States and a slow economic growth. Most economists expect new trade barriers to a temporary eruption of higher inflation.
How long can it take before the prices rise?
Consumers could see a rapid increase in prices for non -durable goods, including groceries. Most avocados in the United States are imported from Mexico, and they can become more expensive within a few weeks after the rates. Prices for cucumbers and tomatoes can also spijken. It may take longer for the prices to rise for sustainable goods, such as cars, thanks to the existing inventory, or if companies expect the rates to be temporary.
“It can take a while, but if these rates are there to stay, then these price increases will eventually come,” says Felix Tintelnot, associate professor Economy at Duke University.
How did Mr. Trump his rates justified?
After taking office, Mr. Trump said that he would impose rates on Canada and Mexico, because the neighboring countries allowed “massive number of people to come in and come in Fentanyl.” His arguments since the inauguration day – which penalties are needed to stop the flow of migrants and drugs to the United States – follow months of similar threats during his presidential campaign.
Mr. Trump issued the executive orders according to a law called the International Emergency Economic Powers Act, in which he extended the scope of a national emergency situation that he declared on his first day with regard to a “inflow of illegal alien beings and illegal drugs “.
Canada and Mexico have already indicated a possible retribution. The Canadian government has made plans to focus on orange juice from Florida, Whiskey van Tennessee and peanut butter from Kentucky, while the president of Mexico, Claudia Sheinbaum, has said that her country is willing to respond with retribution rates.
“When the United States is improving, Canada is ready with a powerful and immediate response,” said Prime Minister Justin Trudeau of Canada on social media on Friday.
However, Mr Trump's executive orders are intended to limit the assets of the affected governments to fight back. The United States can increase its rates if the countries take revenge by imposing their own import duties or taking other measures, according to a clause in the orders.
Have American companies prepared?
In anticipation of Mr Trump's announcement on Saturday, American companies did not seem to make a joint effort to hurry in shipments from Mexico and Canada. But efforts to bring in goods before the rates have probably contributed to an increase in the transport of shipping containers in North America in the first four weeks of the year compared to the same period in 2024.
Data for Saturday showed modest higher freight volumes on the road and rail. TransportExperts said that for rail and truck companies the situation differed from 2021 and 2022, when a flood of input overwhelmed the supply chains, causing shipping costs to shot up and the inflation feeds a rapid acceleration of inflation.
