By: Eddy “Precise” Lamarre

Donald Trump recently announced his intention to impose tariffs on China, Mexico and Canada. Trump has proposed a 10% increase on Chinese goods and a 25% tariff on goods from Canada and Mexico. He is leveraging border security and drug trafficking to legitimize this move.

Tariffs are taxes imposed on imported goods. Generally, these costs are passed on to the consumer. Car purchases, electronics and everyday items can see price hikes as a result. According to the National Retail Federation, these tariffs could reduce Americans’ spending power by $46 billion to $78 billion annually.

The idea behind Trump’s tariffs is to increase stateside manufacturing. In theory, this would increase production in the U.S. and create more jobs. However, because many items produced in the U.S. require parts from overseas, this could cause shipping delays and higher prices that could actually create job losses. Companies may opt to leave the United States to curb many of these costs.

The countries affected by these tariffs will undoubtedly make it difficult for the United States to do business and could ultimately affect the employment landscape. This strategy is an attempt to flex the economic muscle of the United States and make “Made in the USA” a point of pride while the country works to be more sustainable and independent of foreign interests.

Interest rates could potentially rise and cause strain on U.S. markets and consumer spending. This could potentially slow the economy and lessen middle-class spending power. Analysts warn that middle-income families could see their annual expenses rise by as much as $2,600 if these tariffs are fully implemented.

Trump’s assertions are already causing havoc in the markets as the Canadian dollar and Mexican peso have taken a hit. Depending on who you are and where you fit in with regard to the U.S. economy, these tariffs can be beneficial or hurtful. This has yet to be seen.