Trump’s Tariff, Bane, or Boon for You?

Imagine waking up to a bright morning. You are enjoying your cup of joe and scrolling through social media sluggishly. Gearing yourself for the rest of the day ahead, and then BAM! You see the news. Trump has introduced a new set of laws. Imposed new tariffs, to be specific. Your day is already ruined and a hurricane is about to hit your wallets.

This man’s antics have been insane ever since he got elected back into the White House. He has actively pushed American society into a regressive state. However, that is a conversation for another time. Coming back to the tariff tragedy, let’s start with the basics.

The Typhoon called ‘Tariff’

What’s a tariff? In layman’s language, tariffs are taxes that are charged on goods imported from different countries. Trump imposed a 10% tax on all Chinese products. Thus, an extra $1 would be charged for a product that costs $10.

At first, the president declared he would levy a 25% tax on products from Mexico and Canada. Such a bold move could lead the US economy down a treacherous path.

The most popular kind of tariff is one that charges a percentage of the value of the goods. Another kind places a certain amount on imports, regardless of their worth. The US government collects the tariffs from businesses that import goods from other countries.

Trump’s Obsession with Tariff

In his chaotic campaign, Trump provided the impressionable citizens of the US that he would introduce import duties on some business partners of the US. He contends that the tariffs will increase US manufacturing, safeguard employment, increase tax receipts, and stimulate economic growth.

In addition, Trump claims that he is using tariffs to “fight the scourge of fentanyl,” a potent substance that results in tens of thousands of overdose fatalities annually in the United States.

While Mexican criminals illegally provide the drug and operate fentanyl laboratories in Canada, his government claims that the ingredients needed to create it are imported from China.

According to Canadian Prime Minister Justin Trudeau, his nation supplies less than 1% of the fentanyl that enters the US. In addition to putting economic pressure on these trade partners, Trump has expressed a want for Canada to become the 51st state in the union—a proposal that Trudeau has vehemently opposed. This man is truly testing the waters. International waters, that is.

China, China, China

Trump’s 10% tariff may affect about $450 billion in imports from China, which the United States imports a lot of goods from. $450 billion is an astoundingly large sump!

During his first term, Trump implemented more specific tariffs. The impact will be felt by more Americans this time. Numerous consumer products, such as electronics, toys, video game consoles, and shoes, are among the imports that are impacted.

China is the source of many parts for American companies, as well as the gear and equipment. They utilize it in their manufacturing operations. Thus, production costs in the United States will also increase. The tax burden per American home will increase by $172 as a result of the tariffs on China alone, according to the Tax Foundation.

Additionally, unlike during Trump’s first term, Apple is not an exception this time. “So iPhones, iPads, tablets, laptops — all of that from Apple would now be hit, which is kind of a big escalation compared to how consumer goods were shielded from most of the first trade war tariffs,” says Erica York, Vice President of Federal Tax Policy at the Tax Foundation.

For starters, importers pay a tax that is determined by the item’s cost rather than its full retail price. Additionally, since rival Samsung manufactures many of its phones in South Korea or Vietnam and won’t be affected as much, Apple may attempt to increase manufacturing in other nations, such as India. Or it may choose to bear the burden of the tariffs.

Even if, on the surface, the change may not be visible, deep down the foundations have started to rot with each passing minute reaching closer to collapse.

“It means incomes and returns to shareholders in the U.S. economy are lower instead because if businesses have to eat those higher costs, it means they have less to pay their workers,” York adds. It implies that they have less money to invest or to acquire new employees. Therefore, Americans are harmed by the tariffs regardless of the path the price impact takes.

In response, China imposed 10% tariffs on crude oil, farm equipment, and some other vehicles, as well as 15% duties on American coal and liquefied natural gas, which went into force on February 10.

The Apex Partners

Trump’s proposed 25% tariffs on Canadian exports. These exports were also scheduled to go into effect on Tuesday, and “will be paused for at least 30 days while we work together,” according to Canadian Prime Minister Justin Trudeau.

Additionally, Trudeau’s 25% retaliatory tariffs on US goods valued at 155 billion Canadian dollars ($107 billion; £86 billion) were suspended. Trudeau promised that Canada would execute a “$1.3 billion border plan” to bring “new choppers, technology, and personnel to the border” and “increased resources to stop the flow of fentanyl” in return for the pause.

In December, a large portion of the border security strategy was made public. According to Trump, the US will be able to determine “whether a final economic deal with Canada” as a result of the delay.

Both Mexico’s actions against US products and the anticipated 25% tariffs on Mexico have been postponed by one month. Ten thousand National Guard personnel will be sent to the US-Mexican border by Mexican President Claudia Sheinbaum to “prevent the trafficking of drugs, in particular fentanyl.” According to President Sheinbaum, the United States has committed to strengthen its efforts to stop the illegal trafficking of powerful American weaponry into Mexico.

America’s Grocery List

Trump imposed less onerous tariffs on China during his prior administration. Just when you thought that he was inexpedient in his previous term, he has broken his record and proved us otherwise. This time, it seems that all Chinese items are subject to the levies.

A number of things are anticipated to increase in price if the restrictions on imports from Mexico and Canada eventually proceed. Tariffs may have the greatest impact on the auto industry. Before a car is fully constructed, its components must pass through the US, Mexico, and Canada several times.

According to financial expert TD Economics, the import duties might result in a $3,000 rise in the average price of a car in the United States. Other Mexican products that can be impacted include beer, liquor, fruit, and vegetables.

Apart from this, some Canadian products like steel, timber, cereals, and potatoes would probably become more expensive. Canadian energy will have 10% tariffs imposed instead of 25%.

Does Inflation Tag Along with Tariff?

Economists believe that consumers bear a share of the cost of tariffs. Imported items may see price increases from sellers. According to government figures, the price of laundry equipment increased by 34% between 2018 and 2023 as a result of taxes on imported washing machines and then decreased once the duties ended.

These additional tariffs may worsen inflation and spark a larger trade war. This is just the spark point that will lead to huge fires in the global trade. Keeping history in mind, the US has been observed to cause a rippling effect in other economies.

Conclusion

The havoc caused by these tariffs is a common case of greed and corruption. The common, hard-working people are used for the personal avarice of people like Trump for one, and left to suffer and deal with the harsh realities of being a commoner. When individuals cater to a small cohort and use the majority as pawns in their version of the larger picture, the ecosystem as a whole is disrupted. This is just the tip of the iceberg named disaster. Who knows what this presidency has in store for people? But by the looks of it, nothing good. It’s time people take back control. These times call for a revolution. Or else, the dystopian society predicted by the Simpsons will be here in a wink of an eye and there will be no escape.