Donald Trump tells Canada to become a state to avoid his tariffs
Donald Trump tells Canada to become a state to avoid his tariffs
Trump claimed Americans "don't need" Canadian lumber, energy or cars.
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.
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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.
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.
I think this is my whole point? You'd obviously buy the cheaper one of the products are (fairly) identical. So the Chinese product is disregarded, and thus that market is being hurt.
Sure ok but to make that point you have to skip over all the other significant impediments to this plan.
You need to build, staff, and supply a local manufacturing plant for toothbrushes.
This is no small thing and not something that can be created overnight. It's not even as simple as "building" a factory... you need the supply chain, and most of the requisite supplies probably come from China - plastic to make the brush head, plastic to make the handles, machines to form the plastic, and technicians to maintain those machines. If you want to invent all these things locally and avoid the retaliatory tariffs from China, that's going to take decades.
During those decades consumers will be buying the tariffed Chinese toothbrushes wondering why the fuck everything from toothbrushes to shampoo to laundry powder to televisions costs twice as much as it does in any other country.
So my whole point is, there's a "threat" to Chinese producers but it's not very likely to materialise because the US will lose the political will to maintain the tariffs long before locally made products appear.
I was thinking more along the lines of choosing other manufacturers that already exist, that don't have tariffs affecting them, but in case they don't (exist), you definitely have a good point from what I can understand. 👍😁
Thanks for explaining!
Yeah but it only really works if it's targeted. Threatening blanket tariffs on countries that represent 60% of all imports (EU, China, Mexico, Canada) takes a bit of the impact away, it's unlikely domestic production could handle all that. Even if it could, why wouldn't American companies raise their prices as much as they felt they now could?
Probably true. I don't know enough to speak further down this line. 😅 But I thank you for joining and sharing that! Interesting!
Idk but Trump just tried to threaten Canada with them so clearly some Americans don't know.
Sorry, you lost me there.