Foreign Policy Live
Trump’s Tariff Wars
Jan 31, 2025
In this engaging discussion, trade expert Brad Setzer, a senior fellow at the Council on Foreign Relations, reveals his skepticism regarding the Trump administration's aggressive tariff strategies. He argues that imposing a 25% tariff on Mexico and Canada could have severe economic repercussions. Setser contrasts these actions with past trade practices, delving into their impact on consumer prices and cross-border supply chains. The conversation also navigates the complexities of global trade dynamics and the potential shifts in U.S. influence.
49:19
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Quick takeaways
- The proposed 25% tariffs on imports from Canada and Mexico could trigger significant economic shocks due to their pivotal trade roles with the U.S.
- Trump's aggressive use of tariffs as a primary negotiating tool marks a fundamental shift in American trade policy, impacting global economic dynamics.
Deep dives
Impact of Tariffs on Global Trade Patterns
Tariffs serve as taxes on imported goods, providing revenue and protection for domestic industries. The proposed 25% tariffs on goods from Canada and Mexico could cause significant shocks to the U.S. economy, as these nations are key trading partners, representing a large portion of GDP. For example, the U.S. imports roughly $400 billion from Canada, primarily oil, and imports about $500 billion from Mexico, with autos and auto parts being critical. Such tariffs would not only affect import prices but could lead to inflationary pressures and diminish overall economic momentum.
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