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The Trump administration granted a one-month exemption from tariffs to US automakers General Motors (GM), Ford (F), and Stellantis (STLA) on Wednesday. Experts have forecasted that price hikes tied to President Trump's tariffs against Canada and Mexico could drive car prices higher by as much as $12,000.
While agricultural products may also soon earn exemptions, Trump's new tariffs on steel and aluminum are scheduled to take effect March 12 with reciprocal levies also set to start April 2.
Paul Krugman, a Nobel Prize-winning economist, joins Morning Brief host Seana Smith to provide insights on the potential economic of these tariffs.
"I mean the tariffs on Canada and Mexico, if you had to choose among places to have a trade war with, that would be kind of the worst because there really is no such thing as US manufacturing anymore. There's North American manufacturing," Krugman says, explaining the manufacturing relationship between American auto companies and Mexico and Canada. "It's a deeply integrated manufacturing complex that sprawls across both our northern and our southern border."
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Krugman emphasizes that the uncertainty of on-again, off-again tariffs could freeze decision-making for businesses: "This is almost... pessimal. It's almost the worst thing you can do is to have destructive tariffs that may or may not happen."
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Josh Lynch