Donald Trump, the US President announced Monday that tariffs will be imposed on agricultural exports starting on April 2. This is another step towards trade protectionism.
Trump said in a post on social media that American farmers should “get ready” to make a large amount of agricultural products to be sold IN-SIDE the United States. He did not, however, specify what imports were affected or if any exceptions would have been granted.
This move does not appear to be part of the “reciprocal tariff” strategy that he had previously proposed, in which duties would be imposed on almost all US trading partners.
Trump’s Tariff Plans
The president’s latest tariff proposal is part of a long list that he has made since his return to White House.
US Commerce Secretary Howard Lutnick has confirmed that the tariffs against Canadian and Mexican products will take effect Tuesday. However, Trump will determine the final rate.
The President had threatened to impose 25% on both imports, due to concerns about illegal immigration and drugs trafficking.
In response to the allegations that Beijing does not do enough to stop the flow of fentanyl to the US, a 10% tariff will also be implemented.
The total rate of tariffs on Chinese exports would be at least 20%. This follows a 10% tax imposed last week.
The President has announced that he will impose 25% duties on imports of automobiles as well as similar taxes on pharmaceuticals and semiconductors.
Trump also announced that the 25% steel and aluminum tariff will go into effect March 12 with no exceptions.
Canada, Brazil and Mexico are the top steel suppliers to US.
Trump imposed tariffs similar to those he imposed in 2018 but granted later exemptions to several countries including Australia, Canada and Mexico.
According to the U.S. International Trade Commission, despite these exemptions, US Steel and Aluminum prices increased by 2,4% and 1,6% respectively.
Trump instructed his administration last month to examine imposing reciprocal duties on a country by country basis. He argued that the US is unfairly disadvantaged in the global trading system.
Trump is expected to take action after the Commerce Department and US Trade Representative complete their study by April 1.
Trump announced at the cabinet meeting on February 26, that he will announce “very shortly” sanctions against EU products. He specified they would be in general 25%, and would apply to automobiles and other goods.
Trump had previously described the U.S. trade deficit of $213 billion with the EU as “an atrocity” in 2024.
Trump’s Tariffs: The Impact
The tariff on all Chinese products over $800 is 10%, and the tax rate for steel imported worldwide is 25%.
The economists caution that companies selling imported goods could raise their prices in order to compensate for these taxes.
Tariffs on Mexican imports and Canadian products are expected to increase the price of these goods.
Auto industry is particularly vulnerable, since vehicle components frequently travel across US, Mexican and Canadian border before being assembled.
According to Anderson Economic Group, tariffs on Canada or Mexico may increase the price of US cars by up to $12,000.
Costs for a cross-utility vehicle will increase by $4,000 at the very least, and triple with an electric vehicle.
Fruit, vegetables, beer, liquor, and spirits are also potentially affected. Prices for Canadian steel, wood, grain, potatoes, and grains are expected to increase, while Canadian energy will be subjected to a tariff of 10% instead of 25%.
As new information becomes available, this post President Trump will impose agricultural import tariffs on April 2, 2019 may change.
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