How will tariffs on Canada, Mexico and China affect the United States?
- hh7003
- Apr 26, 2025
- 4 min read
Owen Armentrout
Feb. 17, 2025
On Thursday President Trump put his John Hancock on a plan to enact retaliatory tariffs of equal footing on any nation that has imposed tariffs on U.S. goods. This comes as the reevaluation date of March 1st for tariffs on Canada and Mexico is fast approaching.
While the tariffs on our neighboring countries were delayed, both will still feel the effects of the 25% tax on steel and aluminum. Not to mention that China was hit with a blanket 10% tariff.
In 2024 the U.S. imported 6.6 million metric tons of steel and 3.2 million metric tons of aluminum from Canada alone; they are our main supplier by a substantial margin, according to the United States Census Bureau.
Trudeau has stated that reciprocal tariffs may be imposed on vehicles, steel, aluminum, and fruits. While the U.S. exports far less steel and aluminum than we import, Canada and Mexico are still our central markets.
Although the blanket tariffs for both Canada and Mexico have been halted it’s important to note those that have been enacted could have severe impacts on agricultural, automotive, and construction industries here in the U.S., and down the line that bill is set to be fronted by the consumer.
Some economists have said that this is merely political posturing to enforce other issues, stating that these price hikes will be temporary; however, regardless of the duration these tariffs could have long-lasting consequences on our global relations, and frankly who’s to say that these policies will be temporary when several times President Trump has floated the idea of replacing income taxes with the revenue accumulated from tariffs.
In 2024 the U.S. imported nearly $413 billion worth of Canadian goods; The keystone purchases being mineral fuels, vehicles, and machinery.
Regarding Mexico, the U.S. imported a little less than $506 billion worth of goods, mainly comprised of vehicles, machinery, and electronics.
Here lies the first problem that the automakers are facing down one end of the economic double-barrel.
Wayne State University’s economics professor Michael Belzer comments on transportation hardships that may befall Michigan auto plants.
On Wednesday Ford CEO Jim Farley said that this proposed 25% tariff on our neighbors would impact the industry in an unprecedented fashion.
But what about the farming sector?
In 2024 the U.S. exported nearly $176 billion in agricultural products. 47% of which is traded with Mexico, Canada, and China at a rate of 17%,16%, and 14% respectively, according to the Foreign Agricultural Service.
In 2024 the United States imported almost $6 billion of Chinese agricultural goods, according to the United States Department of Agriculture’s Economic Research Service.
While China’s retaliatory tariffs currently only apply to agricultural machinery, it’s wise to note that during Trump’s first term, China placed a 15%-25% tariff on U.S. pork, wine, soybeans, and various other crops. For perspective, China is the largest importer of U.S. pork.
The rate has fluctuated over the years, remaining at 12% since 2022, but it signals that reciprocal levies may be put in place. Perhaps once again sparking a trade war with the U.S.’ third largest agricultural importer.
Although, agriculture is miles away from being the proverbial bread and butter.
In 2024 Chinese imports accrued to nearly $439 billion, the leading horses being electronics, machinery, and toys & games.
A Trek employee from a shop in Southeast Michigan explains how these tariffs could affect the bicycle industry.
One must also remember that the newly imposed 10% tax on the Chinese stacks onto the shoulders of the tariffs that came before it.
Notably, before leaving office President Biden implemented a 25% tariff on certain tungsten products, followed by a 50% tariff on semiconductors, solar wafers, and polysilicon from China.
Tungsten is used in various medical products like x-ray tubes and radiation shields, semiconductors are used in electronics from computers to vehicles, and solar wafers are the intermediate product of solar cells; polysilicon is the foundational raw material of both semiconductors and solar cells.
That being said, as of 2022 China produces over 80% of the global polysilicon supply, according to Statista.
Filipa Carvalho works at INCOE Corporation specializing in hot runner systems; this is what she had to say regarding the U.S. auto industry.
While the United States is in the process of building critical infrastructure for manufacturing semiconductors under the CHIPS Act, those facilities are still a ways out from completion.
Currently, the U.S. only accounts for 10% of the world’s semiconductor production, according to the National Institute of Standards and Technology.
Taiwan accounted for 60% of the global semiconductor supply; however, they happen to manufacture 90% of the world’s high-end logic chips, according to the Asia-Pacific Foundation of Canada.
While they haven’t been implemented yet, we know more tariffs are on the horizon. Back in January Trump said that Taiwanese chips could take on rates as high as 100%.
This is where automakers shift their head to the next barrel.
The U.S. has moved to secure more leverage in the semiconductor market, and yet they’re taxing the import of raw materials from the world’s leading producer at a rate of 60% while teasing the notion of placing a 100% on the leader in high-end chips.
This combined with the 25% tariff on steel and aluminum has the potential to cripple the U.S. auto industry.
Perhaps these tariffs will drive more companies to the United States and make us more self-sustaining, or perhaps they’ll just raise the cost of living even higher and threaten our economic stability. All American consumers can do is sit tight and hope for the best.
Comments