Tariffs On Products From Mexico

[Pootklopp]

Thoughts on retaliatory tariffs from Canada, Mexico, and china. As there’s a massive trade imbalance with all three, they will be hit much harder than American businesses. The US is the number one consuming nation in the world and tarrifs as a tool can be used to bring a closer balance where there is a huge imbalance. Because the US buys so much more than they buy from us, as the cost of their goods go up, less will sell, hurting the manufacturers bottom line. Tarrifs do work, but come with consequences.

So far in 2024, the us imported 217b more from china than we exported to china.
https://www.census.gov/foreign-trade/balance/c5700.html

TOTAL 2024

104,707.7​

322,172.3​

-217,464.6​

So far in 2024 the us imported 125b more from Mexico than we export to Mexico. https://www.census.gov/foreign-trade/balance/c2010.html

Mexico TOTAL 2024

253,405.1​

378,884.5​

-125,479.4​

different chart with Canada from census.gov, we import 46b more from Canada than we export to Canada.

Month	Exports	Imports	Balance
January 2024	26,303.4​	33,309.1​	-7,005.8​
February 2024	28,499.9​	33,395.2​	-4,895.3​
March 2024	30,756.0​	34,218.1​	-3,462.0​
April 2024	30,643.6​	34,883.6​	-4,240.0​
May 2024	30,566.8​	35,669.4​	-5,102.6​
June 2024	29,930.2​	34,393.2​	-4,463.0​
July 2024	27,702.1​	35,798.9​	-8,096.9​
August 2024	29,983.5​	33,036.4​	-3,052.9​
September 2024	29,152.6​	34,633.3​	-5,480.7​
TOTAL 2024	263,538.1​	309,337.2​	-45,799.1​

By using tariffs to make the price of key goods more expensive, fewer of those items get purchased by the American consumer. This hits the manufacturers in the foreign countries hard because there’s a disruptive “shift” in demand. It also creates an opportunity for US production to compete, albeit at a higher price point, because American workers demand higher wages. Pretty straight forward economic principles that you can count on just like gravity.

If the market for these goods dry up, the foreign manufacturers will be negatively affected, go out of business, and or seek capital support from their government. This pressure becomes the instrument of trade policy change that either allows domestic (in the foreign country) manufacturing to fail, or prices to be lowered or supported by govt funds.

Balance will be had, but it will be painful, one way or another. Personally, I think it’s better to pay 20 bucks for a tshirt and have them USA made than the promised 5 dollar t shirt we got when the textile industry was fully offshored 25 years ago. As soon as the foreign textiles had put American textile out of business, they raised their prices, so it was/is a failed economic policy that hurt the US Consumer.

Is it economic policy or the consumer creating our trade deficit? Consumers speak with the wallet, the US consumer wants cheap stuff and is happy when they get it.

In the end it seems like no matter what, price increases will get passed to the consumer. Will foreign business and other countries suffer, yes. But I'm neither of those, I can't fathom supporting tarrifs.

Sponsored