By Wyatte Grantham-Philips, Associated Press
New York (AP) – The long -standing prices of US President Donald Trump are here, plunging the country into an increasing trade war with China, Canada and Mexico.
The 25% prices of Trump on imports from Canada and Mexico came into force on Tuesday, as well as an increased 20% levy on Chinese products. In response, the three countries have announced reprisal measures.
Experts say that consumers and businesses will be the most difficult success. Large and small companies will face higher costs on the goods they buy in other countries – and may have little appeal but to raise the prices themselves. For consumers, this will probably mean more expensive price labels on everything, cars, household appliances and other large tickets to smaller and daily purchases, including electronics, petrol and grocery store.
How do Canada, Mexico and China react?
Canada, Mexico and China all said on Tuesday that they would impose reprisal taxes on many American products.
China imposes prices of up to 15% on a wide range of key American farm exports, including American cultivated chicken, pork, soybeans and beef. It has also increased the number of American companies subject to export controls and other restrictions of approximately two dozen.
Meanwhile, Canadian Prime Minister Justin Trudeau has announced that his country would slap prices on more than $ 100 billion in American products over 21 days. And Mexican president Claudia Sheinbaum said her country would respond with her own reprisals on American products. Unlike Canada or China, however, she said that she would not announce the specific prices until Sunday – perhaps indicating that Mexico still hopes to defuse trade war.
“All the savings involved in prices will see a loss in their real GDP (gross domestic product) and the increase in consumer prices in general,” said Wendong Zhang, assistant professor of economics and applied policy at Cornell University.
Canada and Mexico will suffer considerably more than the United States due to the size and strengthening of the US economy, added Zhang. For the United States, the prices combined on China, Canada and Mexico could lead to a loss of GDP of approximately 0.4%, or more than $ 100 billion, he said.
The prices can be short -lived if the American economy suffers. But Trump could also impose more prices on additional countries such as India or EU nations, and more products such as computer flea and pharmaceutical drugs. The president injected disorienting and unpredictable volatility into the world economy, leaving it unbalanced while people wonder what he will do.
What is the impact on American companies?
Manufacturing companies and retailers for a wide range of goods will feel the impact.
“International trade is of crucial importance for our business and industry,” Best Buy CEO CEO, Corie Barry. “The chain of supply for consumer electronics is very global, technical and complex. China and Mexico remain sources n ° 1 and n ° 2 for the products we sell, respectively. »»
At Target, sales and profits have slipped during the crucial holiday quarter, customers who have expenses, and there will be “significant pressure” on the profits of the company at the beginning of 2025 due to prices and other costs, said CEO Brian Cornell at the annual meeting of business investors on Tuesday.
The supply chains of automotive companies that cross the borders of the United States, Canada and Mexico could be disrupted – in addition to the automotive parts from China.
What impact will the prices have on consumers?
China prices could have an impact on a variety of consumer products, including mobile phones, children’s toys and clothes that Americans buy every day.
Some companies have worked to delay or reduce consumers by storing what they can or changing manufacturing and suppliers in the United States or other countries not affected by new samples.
However, it is easier to fill up with goods than others. And even certain “made in the USA” products may contain plastics or packaging from China, for example. The broader supply chain changes are also complicated and far from being easy to make.
Regarding consumer electronics, “we expect our suppliers throughout our assortment to transmit a certain level of pricing costs for retailers, which makes price increases for American consumers most likely,” said Barry de Best Buy.
And with the United States that spends billions for fruits and vegetables imported from Mexico and Canada each year, buyers could cope with an additional sticker in the alley of the grocery store. New prices could also increase the prices of tequila, mezcal, whiskey and other minds in these countries.
The prices add another “mental calculation” for consumers in addition to other price pressures today – such as the outbreak of egg prices due to avian flu, says Zhang. He adds that buyers will have to monitor prices for everyday items.
When will customers see prices increase?
Exactly when consumers will see the prices increase, but the perishable will probably be hit first.
Especially during the colder months, retailers are counting on foreign imports for fresh fruits and vegetables, and long -term storage is not an option. Buyers could start to see the prices of products such as lawyers, which come from Mexico, increase throughout the industry from a few days, Target Cornell told Cornell on Tuesday.
But he added that the extent to which prices will increase depends on the way things take place in the coming weeks.
“I think things take place so quickly,” said Cornell. “We are going to look at this carefully and understand, are these long-term prices?” Is it a short-term action? How will it take place over time? I think we all speculate, and I think we will listen to and learn and make sure that we can control the things we can control. But we do not want to react excessively to a day and a title. »»
The writers of the Associated Press Anne of Nnocenzio in New York and Paul Wiseman in Washington, DC, contributed to this report.
Originally published:
California Daily Newspapers
