(Image via msn.com / USA Today)

Staff writer: Gwen Pichette 

Email: gpichette@umassd.edu

Newly-elected president Donald Trump announced tariffs on imports from the United States’s three largest supplying countries Canada, Mexico, and China on February 1st.

The executive orders that were signed merely a week following Trump’s inauguration boldly claimed the U.S. was facing “a national emergency” because of “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl.”  

What exactly will the orders do? 

The orders will effectively put a 25% tariff on goods coming in from Mexico and Canada and 10% tariffs on goods from China. Canada will also face an energy tariff of 10%. 

Yet, many are wondering how exactly tariffs, a form of tax imposed on imports from other countries, can begin to fix complex problems like drug issues.

The White House official site assures that the answer lies in economic leverage, as “tariffs are a powerful, proven source of leverage for protecting the national interest” because “access to the American market is a privilege.” 

However, while using tariffs as leverage may sound simple in theory, many experts are apprehensive as to how it will affect the economy. 

Based on a 2024 study conducted by the Peterson Institute for International Economics, Trump’s larger proposed tariff has the potential to increase the annual costs to U.S. consumers by $2,600. This is expected to hit the lower-income Americans the hardest. 

(Image via piie.com)

This is because a portion of tariffs inevitably end up being paid by U.S. consumers. 

There is a possibility that these tariffs could raise prices of groceries, gas, energy, and automotive sectors—many of which were high on voters’ list of priorities.

How are suppliers responding?

The tariffs are being widely criticized by all three foreign leaders. 

Canadian Prime Minister Justin Trudeau warns against the division and animosity this could create between the two nations—and how it could be detrimental to the future of the U.S. 

“As I’ve said before, if President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us,” said Trudeau. 

Trudeau went on to say in a post on X that he “did not want this, but Canada is prepared.”

The president of Mexico, Claudia Sheinbaum, expressed similar sentiments to Trudeau about unity, stating that “if the United States wants to combat criminal groups that traffic drugs and generate violence, we must work together in an integrated manner, but always under the principles of shared responsibility, mutual trust, collaboration and, above all, respect for sovereignty, which is not negotiable.” 

Sheinbaum also denied Trump’s claims about Mexico, and “categorically reject[s] the White House’s slander against the Mexican government of having alliances with criminal organizations, as well as any intention of intervention in our territory.”

China’s commerce secretary claims that China will challenge the tariffs through the World Trade Organization (WTO), insisting that the tariffs “seriously violates” the rules of WTO.

Retaliatory tariffs from the foreign suppliers were swiftly announced. 

Canada announced that they would retaliate with 25% tariffs on $155 billion of U.S. goods, and Mexico claimed they would be issuing tariffs as well. 

China’s finance administry also announced their plans for retaliatory tariffs. In response to the tariffs placed on them, they will begin imposing targeted tariffs of 15% on U.S. coal and 10% for crude oil, farm equipment, and certain cars. 

Yet, following these threats and a talk with the national leaders, Trump agreed to temporarily pause his tariff plans for at least one month—but only after both countries agreed to direct additional resources to their borders.

Trump later stated that he had a “very friendly conversation” with Sheinbaum in which she “agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.”

As for Canada, Trudeau claims that in return for a pause on the tariffs, Canada will be implementing a $1.3 billion plan to protect the border.

Many remain optimistic about the outcome of these initial negotiations. Kevin Hassett, the Director of the White House’s National Economic Council, stated that there were “positive conversations that have happened over the weekend, and there are positive conversations that are going to happen between the leaders of these countries.”

While some Americans are hopeful that things are settling down, other potential trade wars are looming on the horizon—this time with countries in the European Union.

This came following Trump’s proposal of yet another round of tariffs on all imports. This one is a 25% tariff on all aluminum and steel imports. 

The European Union (EU) then issued a statement criticizing the tariffs, saying: “The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures.”

As tensions rise and trading partners continue to go back and forth, there’s no telling when exactly a resolution may be reached.