Trump's proposed tariffs against Mexico and Canada: What's on the list?

If President Trump imposes 25% tariffs on Mexican and Canadian imported goods, the question is not, 'What’s on the list?' It's ‘What’s not on the list?’ 

We may be looking at either a big presidential bluff or the beginning of a very bad divorce. But, it could have worldwide implications for other nations as well.

President Trump said he plans on February 1st, to impose 25% tariff charges on Mexican and Canadian imported goods; the United States’ two largest trading partners. The tariffs would affect $1.5 trillion in annual trade between the three nations.

The consequences could be enormous for all nations. "The price of those goods would have to increase because of a 25% tariff. But also, there would be an additional cost in terms of labor," said Professor Gustavo Flores, a public policy expert from Cornell University.

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Eighty-percent of Mexico’s exports come to the U.S. Many of the factories manufacturing all manner of hard goods are less than an hour’s drive from the U.S. border.

Major Mexican exports to the U.S. include cars, trucks, machinery, electronics, fruits and vegetables, metals, chemicals, paper, clothes, sporting equipment and toys, even nuclear reactors. But, even U.S. carmakers in U.S. factories that depend on Mexican or Canadian-made parts could be tied up, slowed down or shut down.

Then there's Canada, which exports half of all the oil America imports. "That easily raises all manner of foreign and domestic product costs for Americans. All of this increases the costs of producing most goods in the United States and services in the United States," said Professor Flores.

Canadian-made cars and trucks would be heavily impacted. Also imported from Canada: machinery, uranium, plastics, metals, electronic equipment, wood, paper, pharmaceuticals, furniture, and foods.

What they're saying:

On San Pablo Avenue in Berkeley, there are plenty of places that sell international foods. So we asked folks up here, what do they think of the tariffs and do they think it might lead to a tariff war? "I see it as a tax, especially on people who have to buy goods like here. So much of our stuff comes from Mexico, from Canada," said shopper Eugene Chan. 

"Guess who's gonna pay? The customer is gonna be paying for it. Nowadays, it will be hard to get all the products from one country for sure," said Mi Tierra Foods Market Manager Martin Diaz.

The economies of the U.S., Canada and Mexico are deeply intertwined. 

"What we're likely to see is a retaliation in terms of tariffs adopted on American goods, which makes everybody lose," said Professor Flores.  "The other countries that [are] gonna say, 'OK, its 25%. We're gonna be 27% for whoever is gonna import and that's gonna be worse," said Diaz. 

"It's gonna raise costs and raise inflation across the board for us," said Chan.

Though the U.S. can hold out longer than Mexico and Canada in a tariff war financially, it may not be able to do so with American consumers politically.

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