Tariffs on Imports From Canada and Mexico Are Still a Terrible Idea

During a cabinet meeting on Wednesday, President Donald Trump acknowledged that Americans don’t like high prices.

“We have to get the prices down,” Trump told reporters. “The prices of eggs and various other things. Eggs are a disaster.”

Part of his administration’s solution to the high price of eggs? More imports. As part of a $1 billion plan to combat the bird flu, the U.S. Department of Agriculture (USDA) announced this week that it would seek to expand imports of eggs, The Wall Street Journal reports.

The U.S. is a major global supplier of eggs, so reversing those supply chains is not easy (and eggs are perishable goods, which makes it more difficult), but the maneuver is evidence that at least some members of the Trump administration grasp that prices are the result of supply and demand. A sudden constraint on supply—in this case, the bird flu—has pushed prices higher, and finding alternative suppliers might help ease the pain.

Now, someone in the White House might want to apply that same analysis to Trump’s plan for more tariffs on two of America’s biggest food suppliers.

Trump backed down from his threats to slap 25 percent tariffs on all imports from Canada and Mexico earlier this month, but at the time, he said those tariffs were merely delayed by 30 days. On Thursday, Trump posted on Truth Social that the tariffs on Canada and Mexico would be imposed on March 4 (along with more tariffs on imports from China).

If that’s true—and it is nearly impossible to tell whether Trump’s tariffs threats are legit or merely bluffs at this point—then Trump will be taking a big step away from his promise to “get the prices down.”

Canada and Mexico accounted for 28 percent of all imports to the U.S. last year. If the costs of Trump’s tariffs are fully passed down the supply chain, consumers could be facing $225 billion in higher costs, according to an estimate by the American Action Forum (AAF). The energy and manufacturing sectors figure to be the hardest hit, thanks to the deeply integrated North American supply chains for products ranging from crude oil to critical minerals like cobalt and zinc.

Food prices would likely rise too. The U.S. imports more food than ever before, Bloomberg noted this week, and many of those imports come from America’s two neighbors. Mexico is America’s largest source of agricultural imports, according to the USDA. That includes 63 percent of U.S. vegetable imports and 47 percent of U.S. fruit and nut imports. All of that would be affected by the new tariffs.

If Trump is hoping that Americans won’t notice the consequences of higher tariffs, he’s deluding himself. Polls and news reports indicate that consumers and businesses are already growing weary of Trump’s tariffs, even before the higher costs hit.

Just 28 percent of Americans said they support tariffs on Canada, according to a poll released this week by Public First. Tariffs on Mexico are also unpopular, with just 35 percent of respondents supporting them.

Interestingly, the same poll found that Trump’s tariffs on China are broadly popular—45 percent supported them, while 30 percent were opposed. That suggests Americans are more willing to tolerate trade policies targeting imports from China, a perceived antagonist. Trump, meanwhile, has focused most of his tariff threats since taking office on U.S. allies, including not just Canada and Mexico, but also the United Kingdom and the European Union.

Stephen Kent, spokesman for the Consumer Choice Center, says the poll suggests that imposing tariffs on America’s allies could carry a political risk for Trump.

“This has a lot of potential to backfire on President Trump as his favorability gap shrinks,” Kent said in a statement to Reason. “Americans certainly elected Donald Trump to reassert US strength around the world and to be extra pushy, but when only 28% of Americans express support for tariffs on Canadian imports it goes to show that American voters don’t see Canada as being an opponent of any kind.”

Hopefully, Trump will again back down from his threat to slap tariffs on America’s neighbors and biggest trading partners. But even trade wars that never happen can have costs, and the uncertainty that Trump has unleashed on international trade is already having consequences.

Trade policy uncertainty has reached a record high, according to an index maintained by five economists and updated every month. Meanwhile, four American CEOs told Semafor on Thursday that Trump’s eagerness to impose trade restrictions is hurting stock prices and reducing investments.

“What decision do you make? Do you want to go left or right?” Hassane El-Khoury, CEO of the Arizona-based ON Semiconductor Corporation, told Semafor. “Are we going to grow the business? Well, I don’t know. Are there tariffs or not?”

The country will get a partial answer to that question next week. Right now, it doesn’t look like it will be good news.

The post Tariffs on Imports From Canada and Mexico Are Still a Terrible Idea appeared first on Reason.com.

Source: https://reason.com/2025/02/28/tariffs-on-imports-from-canada-and-mexico-are-still-a-terrible-idea/