Trade Warfare in the U.S.: China’s Imports of Fentanyl and Other Chemicals to the United States
China is a major supplier of the chemicals to make the synthetic opiate Fentanyl, which is used in the US. China vowed to launch a case against Trump in the World Trade Organisation after they were warned that the tariffs would damage future cooperation.
He said that the underlying economic and political grievances between China and the U.S. ran far deeper than those between U.S. and its neighbours.
Last night, talks led to Canada and Mexico agreeing to beef up border security, putting the tariffs on hold for at least a month.
The retaliatory measures were relatively modest, according to a note penned by the head of China economics at the research firm Capital Economics. He estimated that the targeted goods represent, at most, $20 billion worth of annual imports, or around 12% of China’s total imports from the U.S. — a fraction of the more than $450 billion in Chinese goods subject to the 10% U.S. tariff.
The order for tariffs against China, Canada, and Mexico that Trump signed over the weekend was meant to put pressure on those countries to stop migrants and illegal drugs from entering the United States.
The commerce ministry placed two U.S. companies on its list of “unreliable” entities, saying they violated market principles and discriminated against Chinese companies. PVH is the parent company of brands including Tommy Hilfiger and Calvin Klein.
In addition, China’s market regulator announced an anti-monopoly investigation into Google. And the commerce ministry and customs administration jointly announced fresh export controls on a handful of rare metals, including tungsten, indium and molybdenum. Announcements about the Google investigation and export controls did not explicitly mention the U.S. tariffs.
The average price of a vehicle in the US would be $2,700 higher if the proposed tariffs on Canada, Mexico, and China were to come into effect.
The Chinese finance ministry said that the U.S.WTO rules have been broken and that the tariffs will disrupt normal economic and trade cooperation between China and the US.
Why Trump’s tariffs could impact you and your wallet: The impact on American economy, home building and oil prices in the U.S.
Gas prices remained flat at the announcement of the tariffs over the weekend. It’s not yet known if there will be long-term effects on the price at the pump.
There might well be. The majority of imports coming into the Midwest and Mountain West come from Canada, according to the vice president of general economics. Lighter oil from the US can’t easily be switched to the heavier oil from Canada because American refineries are mainly set up to use the heavier oil.
New housing is very hard to build in the U.S. because of the housing shortage. Home building will cost even more due to the tariffs on building materials.
The National Association of Home Builders warned that over 70% of the imports of two essential building materials, softwood lumber and gypsum (used in drywall), come from Canada and Mexico, respectively.
But U.S. reliance on Canadian lumber has declined in recent years due to a combination of fires, beetle infestation and tariffs, says Lincicome, which could mute some of the price effects. There’s a levy on Canadian lumber.
As NPR has reported, the tariffs would raise costs on vehicles like the Toyota Tacoma, which is imported from Mexico, and the Chrysler Pacifica, which is imported from Canada. Cars assembled in the U.S. would also see their prices rise, as many of their parts are sourced from companies in Canada or Mexico.
Carmaking is very integrated among Mexico, the US and Canada. Parts go back and forth between the countries throughout the production process.
Source: Here’s how Trump’s tariffs could impact you and your wallet
Implications of a tariff on U.S. businesses and consumers: How much is it worth to import? A tax perspective from the Tax Foundation
It’s also winter, when Mexican produce is consumed more in the U.S. Tomatoes are a crop that the U.S. produces a lot of in the summer but not so much in the winter. Your tomato imported would be more expensive.
In 2021, Mexico provided almost two-thirds of U.S. vegetable imports and about half of U.S. fruit and tree nut imports, according to the U.S. Agriculture Department.
York said she bought an extra bag of avocados to put in the fridge and some frozen berries. “If you’re going to buy a car, maybe think about doing that,” she says.
But Lincicome says simply that there’s not much you can do. He says “buying American” won’t help much because American producers will raise their prices to nearly match their competitors.
“We make most of our toilet paper here, but because everybody freaked out, went out and bought it,” says Lincicome. “If you start getting really nervous and start stockpiling goods and a lot of other people do that too, you can actually create high prices and shortages where there isn’t even a tariff effect. So I wouldn’t really recommend doing that.”
A tariff is a tax on goods imported from abroad. The higher prices will be stuck on the Americans despite Trump’s claims of paying other countries’ tariffs.
For one thing, importers pay a tariff based on the cost price of the item, not the full retail price. It’s possible that Apple will try to ramp up production in other countries like India, or it can decide to absorb the cost of the tariffs and continue selling phones in other countries.
“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.
U.S. businesses import a large number of components from China, as well as the machinery and equipment they use in their own production processes. The cost of production in the US will go up as well.
According to an analysis conducted by the Tax Foundation, if tariffs are imposed, it would raise taxes by as much as $800 per household in five years.