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.

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[UPTooShort]

Concur. Plus lawyers will be involved.

Not so quick. Trump cited drugs and illegal immigration, pulling out the national security card. He can’t be challenged on that.

 

[32spoke]

I have lost two customers from fentanyl and I really likes both of them. I live in California, and unless someone is willing to eliminate drug precursors being shipped from their country of origin, and unless there is a drug interdiction process that begins to become far more effective, it will continue to kill a bunch of young adults.

 

[WKTJR1]

Not so quick. Trump cited drugs and illegal immigration, pulling out the national security card. He can’t be challenged on that.

I don't disagree but, automakers would likely sue the government under trade agreements, tying the policy up in courts. The ripple effect of higher costs would disrupt the industry, putting American jobs and economic stability at risk. How much economic pain will people put up with to solve this issue?

 

[TacoFreak]

How much economic pain will people put up with to solve this issue?

I think we area about to find out.

 

[dunder]

If we figured out how to slow the flow of illegal guns into Mexico, then I bet they’d be more interested in slowing the flow of drugs into the US.

 

[UPTooShort]

The flow of drugs is only in response to the demand. America loves drugs. Both sides can close the southern border, but the drugs will still come in, until the demand goes away.

 

[oxi]

I recall the chicken tax years ago that forced Toyota to work with GM at the NUMMI plant to build Toyota pickups in Fremont, Ca. to avoid the 25% hike in price.

Since then, the passage of NAFTA defined vehicles built in Mexico and Canada to be North American built, thus not an import. That is how the Big 3 got away with building so many vehicles abroad.

The top 3 biggest auto importers into the U.S. were GM, Chrysler and Ford in that order back in the 1990's or so. I recall the day I could drive and park my 1997 2wd Tacoma in the local UAW lot, that stated "only North American union-built vehicles allowed." Those were the days.

Trump threatened tariffs on Toyota in 2017 when Toyota built the new plant down in Mexico. Nothing came of it.

Looks like the new President of Mexico is already working with Trump to curb cartels, illegals and so forth to avoid the tariff.

I have had the luxury of owning a UAW built Tacoma (2010 SR5 Fremont, Ca.)and a non-UAW built Tacoma (2016 SR San Antonio, Tx.) before my new Mexican made Tacoma. All I can say, no difference with any of them. Solid built units, some fit/ finish with my new 2024, but it is running strong.

 

[socaltubbs]

A good discussion and a lot to think about for people considering a Tacoma. I'm glad to see that we really can talk like adults on the internet, even though I hesitated to start this discussion.

At this point it is all just speculation and it will be interesting to see where this goes. I don't think we will know one way or another for a while yet, but significant price increases could be on the way for our favorite trucks.

While I too agree that all of the tariff talk is just speculation, markets do respond to speculation. I could see dealers and the media taking this as an opportunity to "Light a Fire" for some impulse buying. "Buy now before the Trump tariffs" could be the line we hear. If this is successful, we could see a demand spike and a corresponding increase in sale prices well before any tariff is implemented. Buyers hold the key here. Be a patient and smart consumer is the prudent plan.

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