To hear President-elect Donald Trump tell it, trade wars are good and easy to win. And he plans to wage new trade wars — against American allies and adversaries alike — as soon as he enters the White House.
Trump has talked about placing higher tariffs on all imports, from every country, in a bid to boost domestic industries. He sees tariffs, which often result in higher prices for American consumers, as potent negotiating tools. This week, he promised to impose hefty 25% tariffs on all products from Canada and Mexico despite having spent much of his first term updating a trade agreement with those countries.
If he follows through, the new fees would have far-reaching effects. Canada, Mexico and a third country Trump often threatens with higher tariffs — China — are America’s top three trading partners. New tariffs would hike operating costs for foreign companies, which would likely pass along at least some of that burden to consumers. Many American manufacturers rely on products from Canada and Mexico in their supply chains, too, meaning domestic industries would also face uncertainty and higher prices.