Trade Groups Express Concern Over Tariffs
Trade groups are expressing concern over the Trump Administration’s imposition of tariffs on Canada and Mexico and additional tariffs on products imported from China.
According to information from The White House, the President is implementing a 25% additional tariff on imports from Canada and Mexico, and an additional 10% tariff on products from China. Energy resources from Canada will have a 10% tariff.
However, the tariffs, which could lead to higher prices on a broad range of products for consumers, have raised concerns with various trade groups.
“Imposing steep tariffs on three of our closest trading partners is a serious step,” said David French, executive vice president of Government Relations with the National Retail Federation (NRF). “We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers, and small businesses.”
Jay Timmons, president and CEO of the National Association of Manufacturers, said protecting manufacturing gains that have come from strong North American partnerships is vital.
“The success of President Trump’s landmark trade agreement, the United States-Mexico-Canada Agreement, has strengthened North American supply chains and bolstered economic power across the region, boosting jobs, wages and investments here in the United States,” he said. “Thanks to this agreement, one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China that often engage in unfair trade practices.”
Timmons continued, “A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small- and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses — employing millions of American workers — will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
In November, Walmart CFO John David Rainey told CNBC that the retailer could raise prices if tariffs were put in place.
“We never want to raise prices,” he said. “But there probably will be cases where prices go up for consumers.”
With Trump openly threatening tariffs on three of the nation’s largest trading partners throughout the 2024 Presidential Campaign, retailers have been preparing for this much-anticipated action.
In January, the NRF reported continued growth of imports at the nation’s largest ports of entry. November imports were up 14.7% year-over-year and forecasted to grow 19.2% year-over-year in December. January imports were expected to grow 10% over January of 2024, before the slowdown in February for Lunar New Year and factory shutdowns in China.
Update on Monday, Feb. 3, at 12:30 p.m. ET: The Washington Post reports the U.S. is pausing tariffs on Mexico for one month as the two nation's work on an agreement focused on security and trade.
Update on Tuesday, Feb. 4, at 9:30 a.m. ET: The Associated Press reported that tariffs on Canadian products have also been paused for 30 days.
