By Cole Gee | Staff Writer
As his administration settles in for a second term, President Trump has begun to enact his own vision for the future of the U.S. economy. More specifically, Trump has plans to use high tariffs to even the playing field between Mexico, Canada and China.
President Trump himself has stated that he plans on introducing the tariff sometime around Feb. 1. Tariffs, as a refresher, are a form of tax applied on imports from other countries.
While it’s highly debated how widespread the effects of these tariffs may be, the resounding agreement among economists and global trade experts is that Americans should be prepared to see products become much more expensive.
Lourenco Paz is an associate professor of economics. Based on his experience, he believes that many of President Trump’s claims on tariffs are simply “negotiating tactics” for his economic or immigration policies.
“When you look at Canada and Mexico, they are much smaller relative to the United States,” Paz said. “So in this context, they would have more to lose from a tariff war. So in this case, it’s more likely that they will go to the negotiation table.”
This is a common tactic for President Trump as he reached nationwide celebrity status for his 1987 book, “The Art of the Deal” and his show, “The Celebrity Apprentice.” This isn’t the first time the administration has played hardball with Canada and Mexico. During his first term in 2018, he renegotiated NAFTA (North American Free Trade Agreement) to secure better benefits for American vehicle manufacturers, which then created the United States–Mexico–Canada Agreement or the USMCA.
The belief is that these tariffs will help bring Canada and Mexico to the negotiating table, so President Trump can begin the process of bringing back more manufacturing jobs to the U.S.. However, this process might not be as cut and dry as it looks on paper.
“One of the problems of the current administration is that you never know exactly what they have in mind — if this tariff threat is just because of immigration or they are setting the stage for next year’s trade agreement to USMCA renegotiation,” Paz said.
With the U.S. current inflation rate at 2.89% and the federal government’s long-term goal to bring it down to 2%, the biggest fear going into this new tariff-driven economic plan is sparking a trade war. If other countries implement their own tariffs in retaliation against the U.S., it could drive up prices for everyday products across the country.
Wayne Hampton has 30 years of experience in international business and manufacturing, and he currently works as a lecturer at the Hankamer School of Business. He described President Trump’s business and economic practice as a “zero-sum strategy,” meaning there are winners and losers in business. When it comes to the global economy, no country wants to be a loser.
“So in economics, if you think in terms of zero-sum strategy, it basically means we’re gonna win, you’re gonna lose,” Hampton said. “We’re gonna gain jobs and you’re gonna lose jobs. And generally speaking, that profits nobody within the global economy. It may appear that we’re winning, but we’re now integrated into a global economy. And you have to be win-win.”
Future tariffs will more likely be felt by the average American than the corporations or countries he applies these proposed tariffs to. In a time when many Americans are struggling to pay for groceries and other essential items, many economists hope he’s prepared to offer a fair deal at the negotiating table.
“Well, I know Trump knows this,” Hamtpon said. “I know that he’s got smart economists who consult him. They all know this, but the tariffs will do nothing but make prices higher for you and I at a time when we don’t want that. We need prices to come down. So he’s a big talker. But he’s masterful at negotiating and transactions. So I think a lot of what we’re seeing is his shock and awe tactics to get people to come to the table and negotiate.”
