President Trump started putting Tariffs on imports from Canada and Mexico on March 4th.  These tariffs have the power to hurt the economies of Canada and Mexico causing production to slow, prices to rise, and is currently creating fears of a recession. At the start, Trump placed 25% tariffs on both countries’ imports plus 10% on energy from Canada. The countries have also said that they are willing to put their own tariffs on the US to try and balance it back out and prevent a downturn for their economies. Their reason for this response is that they have more at stake than us as we are one of their largest export markets and they rely on us, so they will feel so much more backlash than us. 

    Some of the biggest effects it will have on Canada will be towards their car manufacturing and energy sectors, once the tariffs are set the car manufacturers will have to pay more taxes to sell their cars and parts to the US. This could stop production while they try and find a way to make the prices work again. In the end, this would result in inflation for buyers. If this causes Canada to back out of trade with us this could cause some issues, as we rely on Canada too. They are the largest supplier of energy for us. The tariffs would be felt wide and far by Canada as they sell to us the most but we can buy from anyone. 

    In Mexico, car manufacturers will feel some pain alongside Canada as they are also reliant on American consumers. While efforts are being made to find other nations to get into trade with Mexico is so reliant on America that finding that economic support will be hard. This makes it incredibly difficult to avoid the negative economic impact on Mexico

     Both countries have made responses to these tariffs. In Mexico, the Mexican President, Sheinbaum has said to CNN that “ her country would try and seek investments from other nations.”Sheinbaum has also said that she is willing to place tariffs on the US. For Canada, the prime minister of Canada, Trudeau has said that Canada will place their own tariffs on the US, creating a 25% tax on American goods. This tariff war won’t end well for any of the three economies involved. Now the nations seem to be deciding if they should keep placing tariffs or find a way to deal until it is fixed. Trudeau said that he is willing to “work with Mexico to find new ways to deal with the tariffs giving some hope that if they can last long enough the tariffs will be lifted. In terms of how it affects the U.S., the tariffs will end up making the prices of exports from Mexico and Canada higher, therefore most Americans will turn to other countries to get better prices and cut Canada and Mexico off. This could end up causing more problems for trade around the world.

    In Trump’s recent address to Congress, he brought up the tax situation, he claimed that the “system” (referring to the exports and imports from Canada and Mexico) has been unfair to the United States. So he plans to start reciprocal tariffs on April 2nd. He expressed the belief that they were taxing us to keep us out of their market, and Trump plans to do the same thing back. What stood out to me is that Trump stated “ they don’t even allow us in their markets.” That could be debated about on both sides but I’ll just say, keep in mind who is more reliant on who.

As of March 12th, there have been a lot of developments in the tariff situation. So, here are some highlights in a timeline.

• Officials in the Chamber of Commerce are concerned about the effects of the tariffs causing a great depression like economy, this paused tariffs (March 5th)
• Tariffs on cars were delayed for one month by Trump (March 5th)
• Stocks come back up after facing decline from automobile tariffs (March)
• Trump placed a tax of 25% on lumber from Canada and created an order that pushes for more American wood to be harvested (March 3-6)
• Trump signs a form pausing tariffs on all UMSCA free trade treaty products for one month(March 6)
• In the wake of the month-long pause Trump threatens to tax 250% on exporting dairy to Canada (March 7)
• As Trump keeps up his plan to implement his tariffs on April 2 he says that it “could go up”, he also can’t tell if America will have to deal with a recession this year (March 9)
• Ontario fights back and says they will add a 25% tax on electricity to some states, he even says that he might turn off electricity if this trade war continues(March 11)
• Trump stopped his plan to start huge taxes on electricity, steel, and aluminum for Canada. Ontario then took down their threat of electricity tariffs and turn off (March 11)
• Trump places his 25% tax on steel and aluminum on Canada, who later responds by saying they will implement 20 billion in retaliation measures (March 12)
• CNN fact-checks Trump’s claims on Canada being “one of the highest tariffing nations anywhere in the world.” This is false (March 12)

This is all just in March, there is much more before this and much more after. Also, keep in mind some tariff issues are also happening with China. Check the news for more information.