The elected president Donald Trump announced this Monday that it will impose an additional 10% tariff on products from China for drugs arriving in the United States, “mainly through Mexico at levels never seen before.”
In a message on his Truth Social network, the Republican magnate, who will take office on January 20, justified his decision by the arrival of drugs, “particularly fentanyl,” and because the Chinese authorities promised him that they would impose the death penalty on drug traffickers who traffic with the United States and “they never did.”
Trump also said he intends to impose a 25% tariff on products from Mexico and Canada for “its ridiculous open borders.”
“This tariff will remain in effect until drugs, particularly fentanyl, and all illegal migrants stop this invasion of our country”Trump wrote with less than two months left until he takes office.
Among his campaign proposals, the former president has promised to start a trade war with China and has assured that it will impose a general tariff of 10% or 20% on all imports entering the United States.
He also wants to have a say in the politics of the Fed. Many economists believe that this platform predicts a rise in inflation and a slowdown in growth.
Trump also promised sweeping tax cuts during the campaign that culminated in his victory over Vice President, Kamala Harris. His ability to fulfill them may depend on the outcome of a House race that remains in doubt even as Republicans won control of the Senate. A divided government would force the new president to negotiate fiscal policy more intensely with Congress.
However, it is Trump’s tariffs – which he has threatened to impose on adversaries and allies alike – that will have the greatest impact on the US economy, according to analysts. The self-proclaimed “tariff man” enacted tariffs on some USD 380,000 million in imports in his first term. In his campaign he had promised much broader measures, including a 10% to 20% tax on all imported goods and a 60% tax on Chinese products.
Trump assures that taxes on imports can help increase incomeas well as reducing US trade deficits and repatriating production. What’s more, as Trump demonstrated the last time he was in office, a president can enact tariffs virtually on his own.
Most economists claim that inflation will increase as a result, because consumers will pay the higher costs that will be passed on by importers who pay the tariffs.
Moody’s predicted before the vote that with Trump as president inflation would rise to at least 3% next year — and even higher in the event of a GOP landslide — from 2.4% in September, driven by rising inflation. tariffs and the departure of immigrant labor. If affected countries retaliate and a trade war breaks out, the US will face “a modest stagflationary shock,” a situation in which economic output stagnates and price pressures increase, said Jay Bryson, an economist at Wells Fargoin a webinar held on October 16.
(With information from AFP, Bloomberg and EFE)
