Bloomberg Daybreak: Europe Edition
Bonus Episode: Trump's New Tariff Vow 'Hugely Significant'
Nov 26, 2024
Jennifer Hillman, co-director of the Center on Inclusive Trade and Development and former U.S. Trade Representative counsel, discusses Donald Trump's proposed tariffs on China, Canada, and Mexico. She highlights the strategic intent behind Trump's announcements, suggesting they are aimed at negotiating leverage. The conversation also explores the potential economic fallout of these tariffs on imports and exports, how they could impact consumer prices, and the Federal Reserve's cautious stance amidst rising trade tensions.
13:28
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Quick takeaways
- Trump's proposed tariffs on Canada and Mexico may severely disrupt established supply chains and escalate trade tensions.
- Market analysts predict that the potential rise in inflation from these tariffs could significantly affect investment strategies and economic stability.
Deep dives
Impact of Tariffs on Trade Relations
The introduction of a 25 percent tariff on goods from Canada and Mexico is projected to significantly strain trade relations with these two largest trading partners of the United States. This elevated tariff could have cascading effects as numerous auto parts and components cross borders multiple times before final assembly. Such tariffs not only disrupt established supply chains but also increase costs for American importers, who ultimately bear the financial burden. With trade between these nations valued at approximately two trillion dollars annually, targeting them with tariffs is likely to escalate tensions and invite retaliatory measures.
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