The result is that Americans will almost certainly face higher costs as companies pay more for parts they need to build cars, dishwashers and tractors, and then firms turn around and pass those higher prices onto consumers.
.. All of Trumps tariffs so far — on China, on steel and aluminum, on washing machines and on solar panels — will end up costing the average U.S. family $80 a year
.. If Trump continues to pile tariffs on China (he has threatened to do another $100 billion) and China retaliates, then the cost to the average family would rise to $210
.. 45,000 jobs will be lost because of the tariffs Trump has issued so far.
.. They also forecast a small hit to the economy and wages.
.. tariffs will hurt the economy because prices will rise, reducing profits for companies and costing consumers more.
Alternatively, tariffs could cause the U.S. dollar to rise, which usually makes it more difficult for American companies to sell their products abroad, another potential hit to jobs and the economy.
.. “When we lose $500 billion a year … in a trade deficit. When we lose hundreds of billions of dollars in intellectual property theft, not only China but others, we have to stop it. We can’t allow this to happen. So in a certain way, I call people patriots because … short-term you may have to take some problems. Long-term, you’re going to be so happy. You’re going to be so happy.”
.. Trump is calling on Americans to pay higher prices for a while because he thinks it will be worth it if he gets concessions from China and the E.U. It’s what economists and business leaders call a cost-benefit analysis, and Trump is arguing it will be worth it in the end.
.. higher costs don’t hit everyone equally.
The reality is every family isn’t going to pay $80. Some families are likely to pay hundreds or thousands or be the ones losing jobs and livelihoods, while most others probably won’t notice the price increases.
.. Gary Cohn, Trump’s former top economic adviser, went as far as to say Trump’s tariffs could wipe out the entire economic gains of the tax cuts
.. Trump and (most of) his top advisers say this is about winning the big economic war of the 21st century.
China and the United States are fighting for dominance in technology and biotechnology. Trump and his team say the United States won’t win if China keeps stealing American intellectual property and technology secrets.
.. But for the farmer or the small auto parts manufacturer that may have a terrible year or go out of business during the tariff battle, it probably won’t feel worth it.
Trudeau takes his turn as Trump’s principal antagonist, and Canadians rally around him
Before he was elected Canadian prime minister, Justin Trudeau faced a consistent type of criticism from his opponents: he was too young and too eager to please, conservatives said. His economic plans added up to “unicorns and rainbows.” He did not have the gravitas to represent Canada internationally.
But President Trump has helped bring together the most bitter of Canadian enemies, as he lashed out at Trudeau following the Group of Seven meeting in Quebec, and even the country’s most staunch conservatives have publicly backed up their Liberal prime minister for taking a tough tone in the U.S.-Canada trade conflict.
“I think sometimes, you know, you have to tell the schoolyard bully that they can’t have your lunch money. And I think that’s what the prime minister did today,” said Jaime Watt, a Toronto-based conservative political strategist. “I think most Canadians would say that they were proud of their prime minister.”
.. Who knows what to do with Trump? Nobody knows what to do with him. His own people don’t know what to do.”
.. Trudeau repeated a certain comment, saying Canada was “polite” but “will not be pushed around.”
.. Trump took the second such comment, made in a news conference after the Quebec meeting, badly. In a tweet, he depicted Trudeau as two-faced, saying the prime minister had been “meek and mild” during the meetings, only to lash out afterwards. “Very dishonest & weak,” he tweeted.
Perhaps some of the falling-out boils down to a misunderstanding of Canadian etiquette, said Bruce Heyman, the former U.S. ambassador to Canada — “especially for somebody who’s coming from the world that [Trump] is coming from, and has been so blunt and so confrontational in his conversations and approaches.”
Canadians, Heyman said, “are collaborators who try to find paths to solutions.” It could be easy for someone to misread them, “not taking them seriously or not understanding the resolve they have.”
.. I think he’s trying to make an example of Canada. Canada’s a small, super-friendly ally . . . and I think he’s just kind of sending a message to the rest of the world: ‘If we can treat the Canadian this way, you ain’t seen nothing yet in terms of what might be coming your way.’ ”
.. Trudeau has two good reasons to change his tone now, Hampson said: First, the NAFTA talks are unlikely to be resolved any time soon. Second, the next federal Canadian election is next year.
“I think he and his government feel under some pressure to talk tough and to do so publicly.”
.. “I’m not sure if it’s been niceness,” he said. “It’s been more cordial — cordial and businesslike.”
.. “I think that Canadians do pride themselves on an international image where we’re seen as being cordial, friendly and even-handed in terms of trying to get along with other states,” he said.
.. “The reality is that even under the best of circumstances, Canada is a middle power and, you know, when you’re a middle power, you have to get along with larger powers. You’re not necessarily going to get along with larger powers by aggressively attacking them.”
.. But Canadians have also supported tougher stances in the past, when there’s a principled reason for taking them
White House to Impose Metal Tariffs on E.U., Canada and Mexico
By keeping trading partners guessing, the president has sought to create leverage in trade negotiations, including in talks over the North American Free Trade Agreement with Mexico and Canada. But in the process, he has sowed an atmosphere of chaos among allies as well as manufacturers uncertain about the ultimate impact on their vast supply chains.
.. Prime Minister Justin Trudeau of Canada said it was “inconceivable” that Canada “could be considered a national security threat.”
.. “For the first time in generations, we’ve really thrown out the rule book with our best trading partners,” said Rufus Yerxa, the president of the National Foreign Trade Council, which represents some of the largest exporters in the United States. “We can’t expect them to continue business as usual with us if we are throwing out the rules. So that means everything from airplanes to agriculture is on the chopping block.”
.. But Vice President Mike Pence on Tuesday phoned to tell the Canadian prime minister that the precondition of a deal was a sunset clause, meaning the pact would automatically expire unless the three countries voted to continue it. The idea has drawn ire from both foreign leaders and business executives, who say it undercuts the surety that trade agreements are meant to create.“I had to highlight that there was no possibility of any Canadian prime minister signing a Nafta deal that included a five-year sunset clause,” said Mr. Trudeau, “and obviously the visit didn’t happen.”.. Germany, in particular, had pressed for a negotiated solution, but officials there grew wary after Mr. Trump announced that he would begin a separate trade investigation into automotive imports. If car tariffs go into effect, they would especially hurt Germany’s economy... The Trump administration has argued that imports have weakened the country’s industrial base, and, by extension, its ability to produce tanks, weapons and armored vehicles. “We take the view that without a strong economy, you can’t have strong national security,” the commerce secretary, Wilbur Ross, said Thursday... The European Union and Canada have objected strongly to the idea that they pose any kind of threat to national security, citing their close alliances and defense agreements with the United States... Canada announced corresponding tariffs on a broad list of American exports, including steel and aluminum, as well as dozens of basic consumer products like ketchup, insecticides and laundry machines. The Canadian tariffs, which go into effect July 1,.. The United Steelworkers union, which represents members in Canada as well as the United States, said the decision called “into serious question” the design and direction of the administration’s trade strategy... The Aluminum Association, the industry trade group, also said it was disappointed. Heidi Brock, the group’s president, said the tariffs would do little to address the larger issue of overcapacity in China “while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon.”
.. “These tariffs are hitting the wrong target,” said Representative Kevin Brady, Republican of Texas. “When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem — China is.”
.. In a more pointed statement, Senator Ben Sasse, Republican of Nebraska, called the tariffs “dumb.”
“Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents,” he said.
Canada Growth at Risk Due to Heightened Trade Anxiety: IMF
Trump administration’s trade, tax policies could weigh on Canada ‘for an extended period’
in the event Nafta was terminated—as Mr. Trump has threatened to do—and there is a reversion to tariff rates under World Trade Organization rules, Canadian economic output could be reduced by 0.4% over the next four to five years, and “by even more if nontariff trade costs increase.”
.. deep U.S. cuts to corporate tax rates pose another “considerable uncertainty” on the Canadian economy, warning the combination of lower U.S. taxes and trade uncertainty could make Canada a less attractive destination for investment.
.. trade uncertainty is prompting some Canadian firms to delay decisions on business investment, while other companies are opting to hedge bets and expand outside of Canada. “We expect business investment to increase, but not by as much as it could without this uncertainty,”