Summary
In a virtual speech at the World Economic Forum, Trump suggested Canada could become a U.S. state to avoid his proposed tariffs on imports.
The remark elicited gasps from the audience.
Trump claimed the U.S. does not need Canadian lumber, energy, or vehicles, vastly overstating the trade deficit between the two nations.
He reiterated his intention to impose tariffs, potentially as high as 25%, on imports from Canada and Mexico starting February 1.
Economists warn such tariffs would raise prices for U.S. consumers.
Reminder that Tariffs dont work as a threat to other nations.
The selling price is the same for the seller, they already give the lowest price they can profit from because the modern era allows international distributors to find a demand anywhere, the buyers are the ones paying the import tax for the same goods.
If you were selling and then the buyer had a tariff you wouldn’t just agree to take less money as a result.
That’s not strictly true, they don’t “pay the tariff” obviously but they do have to balance profit margin and lost sales. Tariffs are likely to decrease number of sales which does hurt their bottom line, the question then is if they just take a loss in sales, cut into their profit margins trying to lower the price to the US (very unlikely the margins are nearly enough for this to be viable let alone preferable) or increase prices further to offset the lower sales. Probably will be mostly the former with raw material type goods and mostly the latter with high end finished goods.
Right, that’s what I was thinking. Surely it hurts the seller. But it also hurts the buyer, so it’s like 🙄 well done, Trump…
Isn’t the point to make the domestic customers choose products from other nations? Why wouldn’t that be a threat to the nation that is selling?
I think it’s a “threat” but not a very good one.
There might be 3 brands of toothbrush available to buy in the US but maybe all of them are manufactured in China. If you just tariff everything from China then US consumers will just pay more because there’s no incentive for manufacturers to absorb the tariff.
It’s a threat to Chinese toothbrush manufacturers because it creates an incentive for other manufacturers to pop up elsewhere, maybe someone will start manufacturing toothbrushes in the US. These toothbrushes would be cheaper than the tariffed ones for consumers to buy, but obviously more expensive than toothbrushes used to be before the tariffs.
In summary, because consumers are unlikely to buy less toothbrushes, they just end up paying more.
Idk but Trump just tried to threaten Canada with them so clearly some Americans don’t know.
Sorry, you lost me there.