The Trump tariffs won’t actually happen

Mexico buys about $300 billion worth of goods from us every year, mostly machinery, oil, autos, food and office equipment. If Trump imposes a 25% tariff on Mexican imports, you can be sure that Mexico will retaliate, at the expense of American jobs. Meanwhile, Mexico will certainly be looking to source these goods from China and the EU. Trade is global. Trump’s tariffs will devastate the US economy and drive up inflation.

I’ve seen speculation that the Trump Administration plans to use tariffs to compensate companies hurt by the tariffs. But American consumers (=taxpayers) will be hurt by tariffs, as they cause the cost of goods, both imported and domestic, to go up. I guess our compensation will be increased inflation.

A lot of smart people believe these tariffs are just the economic equivalent of live wrestling. The tariffs will bring Canada and Mexico to fake-negotiate some face-saving “deal” for Trump so he can re-live his phony USMCA deal that he’s now repudiated.

As for China, the tech bros that have what passes for Trump’s “attention” will convince him that Chinese tariffs will damage their industry. The Trump Administration will negotiate waivers and proclaim victory.

US exports to Mexico