Trump’s prices on Canada, Mexico and China: will they trigger a trade war? | Trump administration

What is a price?

A price is a tax on imports or foreign goods.

Who pays the prices on American imports?

American companies that import goods from abroad pay them. If an American car manufacturer imports part of Mexico, he will have to pay a price once he has arrived in the country.

Why is Trump imposing prices?

Speaking in the oval office, Trump told the media that there were several reasons for his decision: “The number one is the people who spilled in our country, so horribly and so … the number two are the drugs , fentanyl and everything that has come to the country … and number three are the massive subsidies that we give in Canada and Mexico on deficits. »»

Does this mean the start of a world trade war?

It depends on who you ask. After Trump announced the details of the latest prices, Bryan Lanza, principal advisor to his presidential campaign in 2024, told BBC Radio 4’s Today Program: “No … This is the threat of negotiation.”

The president, however, also declared that he was considering prices on European goods in an attempt to reverse the trade deficit, so that some analysts fear that he can transform into a trade war in Tit-For-Tat in As long as the countries whose exporters are subject to prices to put their own on American imports in retaliation.

When Trump put prices on Chinese imports the last time, he was in the White House, Beijing put prices on American imports, including soy beans and corn. This decision finally harmed American farmers, who relied on business with China. Without the approval of the Congress, Trump ended up saving farmers, whose export income dropped at least $ 10 billion (8 billion pounds sterling) after the taxation of prices.

The Foreign Relations Council, an American thinkank, has since calculated that up to 92% of the benefits collected on the prices on Chinese imports have been spent in payments to farmers.

So who wins and who loses?

In the end, it is the consumer who loses prices because they will almost certainly feel the impact by price increases.

Does Trump need conference approval to impose prices?

Republicans have a majority in the House and Senate, which means that Trump has a lot of power in the congress to adopt legislation.

But the president also has the power to impose prices without approval of the congress when it concerns national security, the protection of American industries or in the case of a “national emergency” – very broad reasons which will make a legal affair against Prices that are difficult to fight court.

The way the prices work, in Trump’s mind, is that they will encourage American companies to move their manufacture abroad. “All you have to do is build your plant in the United States, and you don’t have prices,” said Trump, a few weeks before the elections.

But getting out of complex global manufacturing ecosystems is almost impossible for many companies. It takes years to operate a factory, so even if a company theoretically wanted to strengthen its national manufacture to avoid prices, Trump’s mandate is probably finished when it was ready.