This week on Capitol Gains, host Seana Smith, Washington Correspondent Ben Werschkul, and Senior Reporter Rick Newman talk to Capital Economics Group Chief Economist Neil Shearing about the potential impact of Trump’s tariffs on not only the US economy, but Canada and Mexico as well.
If Trump decides to go big and impose a 25% tariff on imports from Canada or Mexico, it will not only be detrimental to our neighbors’ economies but will also impact the United States.
Shearing uses automobile manufacturing as an example as to why this matters to all three nations, regardless of whether or not Americans feel a particular way about the economies in Canada or Mexico.
“I do think you care if the price of your new vehicle is going up by 20%,” Shearing explains. “Because not only is a tariff being placed on the import from Canada, it's being placed potentially by Canada on imports from the US And the same is true from Mexico. The component parts of these cars sometimes cross the border six or seven times before being assembled within the final product.”
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While the actual tariffs have yet to be announced, Americans will have to pay in some capacity once they are implemented.
“I do think there's evidence that in the first round of tariffs imposed by the Trump administration, the cost was essentially passed on to American consumers,” Shearing explains. “So the idea that this is a tax paid for by the Canadians or the Mexicans - or for that matter the Chinese - is baloney. It is paid for by American consumers. We have empirical evidence of that. I think that if you're an ‘American First’-er, that you should care about.”
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This post was written by Lauren Pokedoff.