Sweeping import tariffs have some worried
Here’s what to know as Trump’s sweeping tariffs arrive.
Financial markets rattled for weeks under the strain of impending tariffs may not find relief when President Donald Trump announces some of the details Wednesday, some experts say.
Trump dismisses the warnings of many economists that tariffs will drive up prices, focusing instead on the hundreds of billions of dollars in new, domestic investment projects companies are unveiling to avoid the import taxes.
“Companies are pouring into our Country at levels never seen before, with Jobs (and Money!) to follow,” Trump posted Monday on Truth Social. “It is a beautiful thing to watch!”
U.S. stocks cratered briefly Monday before closing with mixed results for the day. But for March, the S&P 500 and Nasdaq recorded their largest monthly declines in more than two years. Jason Draho, head of asset allocation Americas at UBS Global Wealth Management, said Trump’s announcement Wednesday may not calm the markets.
“As much as investors might hope for it, this is unlikely to put an end to tariff uncertainty,” Draho said. “Uncertainty and market volatility are likely to stay high in the near term as investors recalibrate their outlooks after these events.”
Trump said he wants to spur more manufacturing in the United States with his new tariff targeting foreign car imports, but defining an American-made car isn’t easy. Online automotive marketplace Cars.com found just over half of new inventory vehicles saw final assembly in the U.S. About 19% were assembled in Mexico, 4.2% in Canada and 1.4% in China, as previously reported by USA TODAY.
“No cars are actually 100% made in the United States, with parts sourced from the United States,” Edmunds consumer insights analyst Joseph Yoon said. “It’s going to be a big, big deal for the auto industry, globally, if the tariffs are implemented and enforced at face value.” Read more here.
− Bailey Schulz
White House press secretary Karoline Leavitt said Trump is not concerned with the stock-market selloff ahead of the tariff announcement.
“The president has always said the stock market is a snapshot of a moment in time and he’s doing what’s best for Main Street,” Leavitt said. “Wall Street will work out just fine in this administration, just like they did in the first one.”
She declined to say how many countries would face tariffs in Trump’s announcement Wednesday but said they would offset unfair treatment the U.S. has faced for decades.
She cited a 700% tariff in Japan on U.S. rice, a 100% tariff in India on U.S. agricultural products and a nearly 300% tariff in Canada on U.S. butter and cheese. India has offered to reduce its tariffs to appease Trump.
“It has put a lot of Americans out of business and out of work over the past several decades,” Leavitt said. “It’s time for reciprocity.”
− Bart Jansen
Tariffs are primarily levied on imports, typically to protect industries in the country levying them. Tariffs make imports more expensive, thus making local goods cheaper by comparison. Tariffs also can provide income that can be used to support local industries, fund public programs or cover government expenditures.
And they can serve as bargaining tools to win concessions from trading partners.
“While tariffs may seem to penalize foreign producers by making their goods or services less competitive, the reality is that U.S. consumers and businesses ultimately bear the cost,” the Wilson Center scholars Diego Marroquín Bitar and Valeria Moy write in a “Tariffs 101” analysis.
E.J. Antoni, a public finance economist and senior fellow at the conservative Committee to Unleash Prosperity, disagrees, saying in his opinion piece for Fox News earlier this month that economic history shows tariffs are always at least partly paid for by exporters, not just customers.”
Contributing: Reuters