Concerns Arise Over Trump’s Tariffs on Canada and Mexico Amid…

Delaware economist Robert Fry warns that President Trump’s tariffs on Canada and Mexico could lead to a recession in the United States. Announced tariffs have generated criticism due to potential adverse effects on inflation and grocery prices. While some politicians support negotiation, Fry emphasizes that prolonged tariffs may escalate prices and hurt production.

In a recent address to Congress, President Trump reiterated his commitment to implementing tariffs on crucial trading partners, Canada and Mexico, prompting significant concern regarding their economic impact. He announced 25% tariffs on these nations, alongside a 10% tariff on China, which resulted in an initial decline in the stock market although some recovery was observed in subsequent days. The economic ramifications of these tariffs are being widely debated, with critics warning of potential adverse effects on inflation and grocery prices.

During an interview, Delaware Senator Chris Coons expressed skepticism regarding the tariffs’ potential to make America more affordable, stating, “Trump promised again last night to make America affordable again. But this isn’t going to help make it more affordable.” Alternatively, Republican Representative Ryan Mackenzie voiced a more cautious perspective, indicating hope for negotiations to resolve tariff issues while emphasizing a need for specificity in addressing trade imbalances.

Moreover, President Trump announced forthcoming global tariff plans to be instituted starting April 2, aimed at imposing reciprocal tariffs on all U.S. trading partners. This move sparked discussions about the potential influx of revenue and job creation through local manufacturing. However, these optimistic projections were challenged by Delaware economist Robert Fry, who contended that such tariffs might ultimately hinder economic growth rather than bolster it.

Fry, the chief economist of Robert Fry Economics LLC, cited historical context, noting the U.S.’s historical avoidance of tariffs since World War II. He articulated a cautionary stance towards extended tariffs on Canada and Mexico, stating, “I think if the tariffs on Canada and Mexico stay in effect for more than a few weeks, I think we have a recession.” Fry’s concerns resonate particularly given the strong trading relationships with these neighboring countries, which account for substantial U.S. imports.

Following the tariff announcements, immediate retaliatory measures were planned by Canadian leaders, while Mexico’s president is anticipated to respond shortly. President Trump’s stated rationale for the tariffs includes a desire to curtail fentanyl trafficking across the border. Recently, discussions with Canadian Prime Minister Justin Trudeau yielded a temporary reprieve on auto-tariffs; nonetheless, many tariffs remain in effect, and the broader implications continue to unfold.

As the president noted, “There will be a little disturbance, but we’re OK with that.” Nonetheless, Fry warned that persistent tariffs could escalate prices and diminish auto production, creating adverse effects on the economy.

In summary, the implementation of tariffs by President Trump on Canada, Mexico, and China has generated significant concern among economists and political figures alike. Critiques emphasize potential adverse economic impacts, including inflation and recession risks. While some politicians express hope for negotiation and resolution, others voice skepticism regarding the efficacy of tariffs in creating economic growth. The situation remains dynamic, with ongoing discussions about the future of these tariffs and their broader implications for the U.S. economy.

Original Source: www.cbsnews.com