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American consumers face the possibility of high prices of popular commodities such as tomatoes, avocado and deaka after Donald Trump's decision to slap the definitions of imports from China, Mexico and Canada.
The potential price of Trump's political risk refers to pursuing a commercial policy that can increase the costs of consumer goods in the aftermath of presidential elections in which voters expressed frustration with high inflation.
Customs duties are due to similar procedures during the first period of Trump, but this was during a period of moderate inflation and larger measures.
“I can imagine that retailers may absorb the definitions in the short term, but I think it is with such comprehensive definitions, the prices will rise,” said Amit Khandloual, Professor of World Affairs and Economics at Yale University.
China, Mexico and Canada are three of the largest trading partners in the United States, and are responsible for about 40 percent of the country's trade. The United States is the largest market for Tickilla. Mexico and Canada are among the largest agricultural products suppliers including tomatoes and avocado – between 2019 and 2021 approximately 90 percent of all avocado shipments in the United States came from Mexico.
“You feel that the pain of this price is rising when you don't have good alternatives,” said Khandloual. “Super Bowl is coming, people love to eat Guacamole. It may be simple as if there was no real good alternative to that.”
China sells American machines and mechanical equipment worth tens of dollars annually that enter any number of common devices, from TVs to iPhone.
“We still do not know how China will respond to the additional 10 percent tariffs, but it is likely to be revenge and lead to the high prices of consumer,” said Sina Golaara, a professor of supply and operations management in Georgia. University College of Business.
Some influence will be compensated by the weakening of the Mexican and Canadian dollar, but Trump has at least nodded by the dangers of inflation by placing a 10 percent less tariff on Canada's energy resources, which is the largest import in the United States of the country.
Morgan Stanley's economists have warned that the impact of definitions will appear for the first time in high inflation, with economic activity delayed. They warned that this might delay any political action by the US Federal Reserve to reduce interest rates.
“If we are right that the wide customs tariffs on Mexico, Canada and China will enlarge inflation before slowing the activity, the federal reserve may be on the margin for some time,” Morgan Stanley wrote in a note to clients on Sunday.
The White House said that the definitions aim to pressure the three countries to combat illegal immigration and drug flow such as fentanel in the United States, which are popular issues between American voters.
There is hope that the signs of these numbers are heading in the desired direction that may mean that the definitions are raised or compensated quickly.
In Canada, the most urgent effect will be seen on liquor stores. Most provinces sell alcohol through government -owned stores, and many of them have ordered retailers to withdraw the US wine imported from selling on Tuesday.
Doug Ford, Prime Minister of Ontario, said her alcohol stores sold nearly $ 1 billion of American products annually. Ontario's ban will cut a market about 16 million people for American producers. The British Columbia ban on the alcohol imported from the “red states” led by the Republic will be targeted, according to Prime Minister David Eibi.
On Sunday, the Canadian federal government published a list of 1,256 products that will be hit on its first round of retaliatory tariffs on Tuesday.
Both poultry products, dairy, fresh fruits, vegetables and paper products will be affected, including toilet paper, as well as some processed goods such as washing machines, pajamas and handbags.
The ministers hope that shoppers can turn into international or local alternatives to these goods, while working on the details of a long -term tariff response.
Canadian officials said the list of goods was designed to mobilize the electoral districts in the United States and have an impact with Trump, including exporters in the state -led states. This includes products such as Florida orange juice, and devices made in South Carolina and Ouhayu.
Additional reports before Christine Murray in Mexico City
