{"id":423198,"date":"2024-11-27T14:18:52","date_gmt":"2024-11-27T14:18:52","guid":{"rendered":"https:\/\/www.saipantribune.com\/?p=423198"},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-29T14:00:00","slug":"Autos-food-What-are-the-risks-from-Trump-s-tariff-threat","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/Autos-food-What-are-the-risks-from-Trump-s-tariff-threat\/","title":{"rendered":"Autos, food: What are the risks from Trump’s tariff threat?"},"content":{"rendered":"

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.<\/p>\n

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.<\/p>\n

What products face risks from Trump’s tariff pledges?<\/p>\n

– Canada: Energy, construction –<\/h2>\n<\/p>\n

US-Canada trade ties are significant, with a highly integrated energy and automotive market, the Congressional Research Service (CRS) noted in July.<\/p>\n

Nearly 80 percent of Canada’s 2023 goods exports were US-bound, while about half its goods imports came from the United States.<\/p>\n

Canada has been the biggest supplier of US energy imports including crude oil, natural gas and electricity, the CRS added.<\/p>\n

Economist Ryan Sweet of Oxford Economics warned that a 25 percent tariff on Canadian goods could hit imported fuels, risking higher energy costs.<\/p>\n

“The 2026 midterms are not that far off, and voters don’t forget inflation,” he told AFP.<\/p>\n

The United States imports construction materials from Canada, too, he added, and tariffs could drive up housing costs.<\/p>\n

Last year, $2.5 billion in goods crossed the US-Canada border daily, said Dennis Darby of industry group Canadian Manufacturers & Exporters.<\/p>\n

Imposing tariffs “would also hurt US manufacturers,” he added.<\/p>\n

– Mexico: Food, autos –<\/h2>\n<\/p>\n

The United States is Mexico’s most critical trading partner, taking in 80 percent of its exports, the CRS noted.<\/p>\n

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.<\/p>\n

A 25 percent tariff would weigh on the auto sector, worth tens of billions in Mexico’s US exports, alongside medical instruments and devices.<\/p>\n

Vehicle costs could rise about 10 percent, estimates Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics.<\/p>\n

A significant portion of North America trade happens between the United States, Mexico and Canada with products crossing borders multiple times.<\/p>\n

This means “even low tariffs add up,” said Joshua Meltzer, a senior fellow at the Brookings Institution.<\/p>\n

Agricultural products would also be impacted.\u00a0<\/p>\n

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.<\/p>\n

Additional import costs for Mexico’s fresh fruit and vegetables could be entirely passed to consumers, Hufbauer warned.<\/p>\n

– China: No early concession? –<\/h2>\n<\/p>\n

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.<\/p>\n

“US reliance on China for these goods has hardly budged since 2017. In fact, China’s share in US battery imports has actually\u00a0increased\u00a0in that time,” it added this month.<\/p>\n

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.<\/p>\n

A 10 percent tariff additionally is unlikely to be “fully absorbed” before it hits the consumer, Sweet said.<\/p>\n

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.<\/p>\n

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.”<\/p>\n

– Trade deals threat –<\/h2>\n<\/p>\n

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.<\/p>\n

“Given their heavy, heavy dependence on the US, they will be inclined to do what they can to strike a bargain,” he told AFP.<\/p>\n

But Trump’s tariffs would be inconsistent with a trade agreement between the United States, Mexico and Canada — \u00a0which Trump once touted as the best ever — Meltzer added.<\/p>\n

“It underscores this question of, why do a deal with the Trump administration?” he said.<\/p>\n

bur-bys\/dw<\/p>\n

<\/p>\n

A 25 percent US tariff on Mexican imports could hit the automotive sector, said analysts<\/p>\n

-Pedro Pardo
<\/figcaption><\/figure>

<\/p>\n

A 25 percent US tariff on Canadian imports could hit materials needed for construction, analysts said<\/p>\n

-Frederic J. BROWN
<\/figcaption><\/figure>

<\/p>\n

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<\/p>\n

-WIN MCNAMEE
<\/figcaption><\/figure><\/p>\n","protected":false},"excerpt":{"rendered":"

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