A report in the New York Times dealt with the recent executive orders issued by US President Donald Trump to impose customs duties on Canada, Mexico and China, and reviewed 5 important axes to understand them.
The report, by the correspondence of commercial affairs Daniel Kai, found that customs duties may lead to high prices of commodities on American consumers and economic inflation.
According to the report, this is due to the fact that the affected countries are responsible for more than a third of the American imports, and the president’s decision will enter into force on Tuesday.
What is the percentage of customs duties?
According to the report, Trump’s order imposed 25% fees on all commodities from Canada and Mexico, along with 10% fees on Canadian energy products, and imposed 10% fees on Chinese goods.
These procedures are likely to harm the auto and electronics manufacturing sectors in Mexico, mineral treatment in Canada, agriculture, fishing and car production in the United States.
https://www.youtube.com/watch?v=aym4vj3wgwg
When will the prices rise?
The report suggests that the prices of non -perennial goods such as foodstuffs will rise within weeks, while the high prices of perennial goods, such as cars, may take a longer period due to the presence of a current stock of them.
The report warns of a general rise in prices in various industries if customs duties remain in effect in the long run.
What are the effects of procedures on American consumers?
The report pointed out that the fees may lead to high prices on American consumers, as it is expected that companies will transfer the price of additional costs to the consumer instead of absorbing them, just as they did in the framework of the fees imposed by Trump in his first term.
Consequently, the report continues, which is generally expected to rise in prices, including in grocery stores and gas stations, especially in the American Middle West where Canadian oil is refined and converted into fuel, and analysts warn that these fees may lead to inflation and slow economic growth.
https://www.youtube.com/watch?v=w_oipjdwte
How did Trump justified his decision?
According to the report, Trump said it was imposed in response to Canada and Mexico’s failure to control irregular migration and drug trafficking into American territory.
The report indicated that Trump issued his orders according to the “emergency international economic powers law”, in an attempt to expand the scope of the emergency that he announced on his first day in his post, especially with regard to immigration and drugs.
In turn, Canada threatened to respond to targeting certain American goods, while Mexico plans to take other measures, and the report noted that Trump’s orders include rulings to increase the fees if any reprisal measures are taken against the United States.
What is the reaction of American companies?
According to the report, despite the early warning indications of Trump’s steps, American companies did not rush to import goods from the targeted countries, but experts said that transporting goods through railways and roads increased slightly last month, indicating that some companies tried Transfer of goods before the fees are valid.
