Customers select goods at a supermarket in Foster City, California, the United States, May 15, 2024. (Photo by Li Jianguo/Xinhua)
BEIJING, Nov. 28 (Xinhua) -- U.S. president-elect Donald Trump said on Monday that he would impose a 25 percent duty on imports from Canada and Mexico until they clamped down on drugs and migrants crossing the border.
Critics argue the tariffs would harm economic cooperation and strain relations between the United States and its closest trading partners.
Economists say that businesses will have few options but to transfer the added costs to consumers, leading to significant price hikes for essentials, higher inequality and less consumer choice.
The tariffs suggested by Trump earlier this week could cost every American consumer as much as an additional 810 U.S. dollars a year, said James Knightley, chief international economist at ING, a financial institution.
Car buyers are likely to face even steeper price increases, exacerbating an already challenging market where costs have risen beyond affordability for many. With the average price of a new vehicle currently around 48,000 dollars, the added expense from tariffs could push car ownership further out of reach for many.
Volkswagen, Stellantis, General Motors and Ford are expected to be hardest hit by the proposed tariffs, said Bernstein analyst Daniel Roeska. "A 25 percent tariff on Mexico and Canada would severely cripple the U.S. auto industry," he said.
While the economic repercussions within the United States are significant, the ripple effects of such tariffs would extend across the globe.
Canadian manufacturers, particularly in the automotive and steel industries, fear that the additional costs will make their products less competitive in the U.S. market, which accounts for the majority of Canada's exports.
Speaking ahead of a Wednesday meeting with Canadian Prime Minister Justin Trudeau and other provincial leaders, British Columbia Premier David Eby called the tariffs "unjustified" and "devastating" for the province's forestry and lumber industries.
Jesper Brodin, CEO of the European company Ingka Group which is the largest franchisee of IKEA, said prices would be hard to keep down if the United States enforces its tariff plan.
"In general, we don't believe tariffs will support international companies and international trade. At the end of the day, that risks ending up on the bills of customers," he told CNN Wednesday when asked about Trump's tariffs.
"We have never experienced a period of benefit when we had high tariffs," he said, referring both to IKEA and the global economy.
Mexico is mulling over tit-for-tat moves as President Claudia Sheinbaum suggested Tuesday that Mexico could retaliate with tariffs of its own.
"One tariff would be followed by another in response, and so on until we put at risk common businesses," Sheinbaum said, referring to U.S. automakers that have plants on both sides of the border.
A New York Times article said that whether Trump's tariff threats show his deal-making prowess or simply sow chaos, the approach revealed his eagerness to upend global relationships in pursuit of U.S. advantage.
The latest threats hinted at the potential for another four years of trade tumult, mirroring Trump's first term when he scrambled the country's economic and diplomatic relationships, the newspaper added.
