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Trump vow to impose stiff tariffs at odds with anti-inflation campaign message, Dems say
President-elect Donald Trump says on his first day in office he would impose 25% tariffs on all imports from Canada and Mexico and 10% tariffs on goods from China until those countries stop the flow of illegal drugs and migrants into the U.S. (Getty photo illustration by Olivier Le Moal)
President-elect Donald Trump’s announcement Monday that he would impose harsh tariffs on the United States’ closest trading partners will work against his pledge to bring down consumer prices, Democrats in Congress and economists are warning.
In a pair of posts to his social media platform, Truth Social, on Monday evening, Trump said on his first day in office he would impose 25% tariffs on all imports from Canada and Mexico and 10% tariffs on goods from China until those countries stopped the flow of illegal drugs and migrants into the U.S.
“Thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” Trump wrote. “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
While Trump has not always followed through on threats of stiff tariffs — generating doubts about how severe the next round will actually be — the executive branch does have wide latitude to impose the taxes on foreign goods without congressional approval, meaning it is likely Trump will act in some way.
“We are going to get several tariff threats via rage-posts over the next four years,” Brendan Duke, a senior director for economic policy at the liberal Center for American Progress, said in an interview. “Unclear what exact levels on what exact countries he is going to pursue.”
What about inflation?
Tariffs are consistent with Trump’s preference for a protectionist trade policy, but may actively hurt in an area that was key to his election win over Democratic Vice President Kamala Harris this month: taming inflation.
An analysis from the Center for American Progress said the tariffs Trump announced Monday would raise annual costs for the average U.S. family by $1,300.
Democratic members of the U.S. House Ways and Means Committee, which oversees tax and trade policy, estimated tariffs favored by Trump would increase consumer costs by up to $4,000 per year.
According to CBS News exit polling, 78% of voters said inflation was a moderate or severe hardship. Trump won voters who rated the economy as bad by 40 points over Harris.
Cars, ag and energy to be hardest-hit
About 15% of goods consumed in the United States are imported, Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, an economics research center, said.
Adding across-the-board tariffs on those imports would contribute to consumers’ overall cost of living, even without considering related economic consequences.
“You’ve added to inflation, and that’s assuming that U.S. producers of similar products don’t jack up their prices,” he said. “But experience shows that if the economy is strong, they’ll do just that.”
The U.S. automotive sector, which is heavily integrated with Mexico and Canada with parts of a single vehicle produced in all three countries, could see “pretty startling” price increases, Hufbauer said.
Additionally, the U.S. imports Mexican fruits and vegetables and Canadian oil, complicating Trump’s campaign promise to bring down prices specifically of groceries and gas, Duke said.
“Americans have obviously been frustrated with the cost of food and the cost of gas,” he said. “Some parts of the United States are heavily reliant on Canadian oil, even though we’re a net exporter … So, one would expect price increases, especially in places like the Midwest that are heavily dependent on Canadian oil.”
Tariffs on Chinese goods would increase the costs of electronics, clothing and other consumer goods, Duke said.
Democratic legislation
Ways and Means Democrats, led by Washington’s Suzan DelBene and Virginia’s Don Beyer, and also joined by Earl Blumenauer of Oregon, Terri Sewell of Alabama, Steven Horsford of Nevada, Dan Kildee of Michigan and four others, introduced a bill Tuesday to rein in the executive’s ability to implement tariffs, citing the added cost to American families.
“The American people have clearly and consistently said that costs are one of their top concerns,” DelBene said in a statement. “Imposing sweeping tariffs on imported goods would raise prices on consumer products by thousands of dollars a year according to estimates. Not only would widespread tariffs drive up costs at home and likely send our economy into recession, but they would damage our trade relationships with allies and likely lead to significant retaliation, hurting American workers, farmers, and businesses.”
Trump’s promises of dramatic tariffs go beyond the intent of the law that gave the president the power to enact tariffs, the Democrats said. Congress wanted a president to be able to quickly impose tariffs on hostile foreign countries, but did not intend “to allow a president to indiscriminately impose tariffs without Congress’ approval.”
Tariffs can be an important tool for conducting foreign policy, but the range Trump is proposing is 10 to 20 times beyond what even he did in his first term, Duke said.
He cautioned that the final form of new tariffs may not be exactly what Trump proposed Monday night, though they could be similar.
“He’s gonna do something on tariffs. I don’t know what. It’s probably not these exact levels on these exact countries,” he said. “But it rhymes with it.”
