Sarah K. Burris
November 27, 2024
RAW STORY
Donald Trump speaks during a rally aboard the Battleship USS Iowa in San Pedro. (Joseph Sohm / Shutterstock.com)
Donald Trump is pledging to impose hefty taxes on everything entering the U.S. from Mexico, Canada, and China — but a report Wednesday suggested it might not be so straightforward.
In 2018, Donald Trump unilaterally ushered in taxes on all steel and aluminum imports by signing an executive order claiming that the charge was required for American national security and, in 2019, Trump threatened Mexico with a 5% tax if they didn't stop illegal immigration.
On Wednesday, The Economist questioned whether Trump's promise of hefty tariffs is possible — or if he'd be forced to try and pass legislation through Congress.
The report stated that, over the years, "Congress has ceded more and more authority to the executive branch, and the courts, the third coequal branch of government, have happily blessed the arrangement. Nowhere is this clearer than in trade policy."
When Trump ushered in tariffs on steel and aluminum imports in 2018, he used Section 232 of the Trade Expansion Act of 1962.
But The Economist quoted the U.S. Constitution, which grants Congress the powers “to lay and collect taxes, duties, imports and excises” and “to regulate commerce with foreign nations."
The law now says that the president can raise tariffs on imports if he believes it's in the interest of national security. At the time, the Department of Commerce agreed with his 2018 decision.
Chances are, Trump's own Commerce Department will support him again — but it's unclear whether lawmakers will allow it, The Economist reported.
Sen. Rick Scott (R-FL), who a few weeks ago was MAGA's choice to take over the Senate, had argued that Trump must have Congress's consent to enact his tariff plan.
But The Economist spoke to Warren Maruyama, the former general counsel for the United States Trade Representative, who said that the IEEPA gives Trump more power.
Also Read: Trump covertly planning the world’s biggest protection racket
“So there’s minimal procedural requirements. So, he could do it very quickly — on day one, if he wants,” said Maruyama.
The Economist report also suggests that litigation might follow the move, saying that it violates the USMCA trade law, which Trump negotiated.
But with "national security" exceptions, written into the bill, it might be enough to argue there were no violations, Harvard Law School's Mark Wu told The Economist.
Mexico's president has already promised to retaliate with similar tariffs on the U.S.
Read the full report here.
Donald Trump speaks during a rally aboard the Battleship USS Iowa in San Pedro. (Joseph Sohm / Shutterstock.com)
Donald Trump is pledging to impose hefty taxes on everything entering the U.S. from Mexico, Canada, and China — but a report Wednesday suggested it might not be so straightforward.
In 2018, Donald Trump unilaterally ushered in taxes on all steel and aluminum imports by signing an executive order claiming that the charge was required for American national security and, in 2019, Trump threatened Mexico with a 5% tax if they didn't stop illegal immigration.
On Wednesday, The Economist questioned whether Trump's promise of hefty tariffs is possible — or if he'd be forced to try and pass legislation through Congress.
The report stated that, over the years, "Congress has ceded more and more authority to the executive branch, and the courts, the third coequal branch of government, have happily blessed the arrangement. Nowhere is this clearer than in trade policy."
When Trump ushered in tariffs on steel and aluminum imports in 2018, he used Section 232 of the Trade Expansion Act of 1962.
But The Economist quoted the U.S. Constitution, which grants Congress the powers “to lay and collect taxes, duties, imports and excises” and “to regulate commerce with foreign nations."
The law now says that the president can raise tariffs on imports if he believes it's in the interest of national security. At the time, the Department of Commerce agreed with his 2018 decision.
Chances are, Trump's own Commerce Department will support him again — but it's unclear whether lawmakers will allow it, The Economist reported.
Sen. Rick Scott (R-FL), who a few weeks ago was MAGA's choice to take over the Senate, had argued that Trump must have Congress's consent to enact his tariff plan.
But The Economist spoke to Warren Maruyama, the former general counsel for the United States Trade Representative, who said that the IEEPA gives Trump more power.
Also Read: Trump covertly planning the world’s biggest protection racket
“So there’s minimal procedural requirements. So, he could do it very quickly — on day one, if he wants,” said Maruyama.
The Economist report also suggests that litigation might follow the move, saying that it violates the USMCA trade law, which Trump negotiated.
But with "national security" exceptions, written into the bill, it might be enough to argue there were no violations, Harvard Law School's Mark Wu told The Economist.
Mexico's president has already promised to retaliate with similar tariffs on the U.S.
Read the full report here.
Autos, food: What are the risks from Trump’s tariff threat?
By AFP
November 26, 2024
Fresh tariffs on Canadian, Mexican and Chinese imports could add to costs in areas like autos, building materials and consumer goods, analysts warn, after President-elect Donald Trump threatened new levies - Copyright GETTY IMAGES NORTH AMERICA/AFP CHIP SOMODEVILLA
Beiyi SEOW
Fresh US tariffs on Canada and Mexico could raise costs of automobiles and building materials, analysts said Tuesday, after President-elect Donald Trump threatened to erect new trade barriers.
Similarly, further tariff hikes on China could add to consumer prices, as the United States is still reliant on the world’s second biggest economy for goods like electronics and batteries.
What products face risks from Trump’s tariff pledges?
– Canada: Energy, construction –
US-Canada trade ties are significant, with a highly integrated energy and automotive market, the Congressional Research Service (CRS) noted in July.
Nearly 80 percent of Canada’s 2023 goods exports were US-bound, while about half its goods imports came from the United States.
Canada has been the biggest supplier of US energy imports including crude oil, natural gas and electricity, the CRS added.
Economist Ryan Sweet of Oxford Economics warned that a 25 percent tariff on Canadian goods could hit imported fuels, risking higher energy costs.
“The 2026 midterms are not that far off, and voters don’t forget inflation,” he told AFP.
The United States imports construction materials from Canada, too, he added, and tariffs could drive up housing costs.
Last year, $2.5 billion in goods crossed the US-Canada border daily, said Dennis Darby of industry group Canadian Manufacturers & Exporters.
Imposing tariffs “would also hurt US manufacturers,” he added.
– Mexico: Food, autos –
The United States is Mexico’s most critical trading partner, taking in 80 percent of its exports, the CRS noted.
In 2023, Mexico outpaced China for the first time in two decades to be America’s leading source of imports, government data showed. US goods imports from Mexico stood at $484.5 billion.
A 25 percent tariff would weigh on the auto sector, worth tens of billions in Mexico’s US exports, alongside medical instruments and devices.
Vehicle costs could rise about 10 percent, estimates Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics.
A significant portion of North America trade happens between the United States, Mexico and Canada with products crossing borders multiple times.
This means “even low tariffs add up,” said Joshua Meltzer, a senior fellow at the Brookings Institution.
Agricultural products would also be impacted.
In 2023, Mexico supplied over 60 percent of US vegetable imports and nearly half of US fruit and nut imports, the Department of Agriculture noted.
Additional import costs for Mexico’s fresh fruit and vegetables could be entirely passed to consumers, Hufbauer warned.
– China: No early concession? –
Consumer goods like smartphones and computers, alongside lithium-ion batteries and other products, made up nearly 30 percent of US goods imports from China in 2023, according to the Atlantic Council.
“US reliance on China for these goods has hardly budged since 2017. In fact, China’s share in US battery imports has actually increased in that time,” it added this month.
This is despite a trade war during Trump’s first term, in which he slapped tariffs on hundreds of billions of dollars in Chinese imports.
A 10 percent tariff additionally is unlikely to be “fully absorbed” before it hits the consumer, Sweet said.
Best Buy CEO Corie Barry warned that China accounts for around 60 percent of its cost of goods sold, adding that consumers will likely bear some cost of tariffs.
Meltzer said he expects Beijing would be willing to address US fentanyl concerns — Trump’s stated reason for the tariffs — but might not offer concessions to avoid signaling it would “capitulate every time the US raises tariffs.”
– Trade deals threat –
Hufbauer of PIIE expects Trump will allow a buffer before imposing fresh tariffs on Canada and Mexico, given that this provides an opportunity to negotiate before triggering retaliation.
“Given their heavy, heavy dependence on the US, they will be inclined to do what they can to strike a bargain,” he told AFP.
But Trump’s tariffs would be inconsistent with a trade agreement between the United States, Mexico and Canada — which Trump once touted as the best ever — Meltzer added.
“It underscores this question of, why do a deal with the Trump administration?” he said.
By AFP
November 26, 2024
Fresh tariffs on Canadian, Mexican and Chinese imports could add to costs in areas like autos, building materials and consumer goods, analysts warn, after President-elect Donald Trump threatened new levies - Copyright GETTY IMAGES NORTH AMERICA/AFP CHIP SOMODEVILLA
Beiyi SEOW
Fresh US tariffs on Canada and Mexico could raise costs of automobiles and building materials, analysts said Tuesday, after President-elect Donald Trump threatened to erect new trade barriers.
Similarly, further tariff hikes on China could add to consumer prices, as the United States is still reliant on the world’s second biggest economy for goods like electronics and batteries.
What products face risks from Trump’s tariff pledges?
– Canada: Energy, construction –
US-Canada trade ties are significant, with a highly integrated energy and automotive market, the Congressional Research Service (CRS) noted in July.
Nearly 80 percent of Canada’s 2023 goods exports were US-bound, while about half its goods imports came from the United States.
Canada has been the biggest supplier of US energy imports including crude oil, natural gas and electricity, the CRS added.
Economist Ryan Sweet of Oxford Economics warned that a 25 percent tariff on Canadian goods could hit imported fuels, risking higher energy costs.
“The 2026 midterms are not that far off, and voters don’t forget inflation,” he told AFP.
The United States imports construction materials from Canada, too, he added, and tariffs could drive up housing costs.
Last year, $2.5 billion in goods crossed the US-Canada border daily, said Dennis Darby of industry group Canadian Manufacturers & Exporters.
Imposing tariffs “would also hurt US manufacturers,” he added.
– Mexico: Food, autos –
The United States is Mexico’s most critical trading partner, taking in 80 percent of its exports, the CRS noted.
In 2023, Mexico outpaced China for the first time in two decades to be America’s leading source of imports, government data showed. US goods imports from Mexico stood at $484.5 billion.
A 25 percent tariff would weigh on the auto sector, worth tens of billions in Mexico’s US exports, alongside medical instruments and devices.
Vehicle costs could rise about 10 percent, estimates Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics.
A significant portion of North America trade happens between the United States, Mexico and Canada with products crossing borders multiple times.
This means “even low tariffs add up,” said Joshua Meltzer, a senior fellow at the Brookings Institution.
Agricultural products would also be impacted.
In 2023, Mexico supplied over 60 percent of US vegetable imports and nearly half of US fruit and nut imports, the Department of Agriculture noted.
Additional import costs for Mexico’s fresh fruit and vegetables could be entirely passed to consumers, Hufbauer warned.
– China: No early concession? –
Consumer goods like smartphones and computers, alongside lithium-ion batteries and other products, made up nearly 30 percent of US goods imports from China in 2023, according to the Atlantic Council.
“US reliance on China for these goods has hardly budged since 2017. In fact, China’s share in US battery imports has actually increased in that time,” it added this month.
This is despite a trade war during Trump’s first term, in which he slapped tariffs on hundreds of billions of dollars in Chinese imports.
A 10 percent tariff additionally is unlikely to be “fully absorbed” before it hits the consumer, Sweet said.
Best Buy CEO Corie Barry warned that China accounts for around 60 percent of its cost of goods sold, adding that consumers will likely bear some cost of tariffs.
Meltzer said he expects Beijing would be willing to address US fentanyl concerns — Trump’s stated reason for the tariffs — but might not offer concessions to avoid signaling it would “capitulate every time the US raises tariffs.”
– Trade deals threat –
Hufbauer of PIIE expects Trump will allow a buffer before imposing fresh tariffs on Canada and Mexico, given that this provides an opportunity to negotiate before triggering retaliation.
“Given their heavy, heavy dependence on the US, they will be inclined to do what they can to strike a bargain,” he told AFP.
But Trump’s tariffs would be inconsistent with a trade agreement between the United States, Mexico and Canada — which Trump once touted as the best ever — Meltzer added.
“It underscores this question of, why do a deal with the Trump administration?” he said.
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