{"id":327310,"date":"2025-12-05T16:01:14","date_gmt":"2025-12-05T16:01:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/327310\/"},"modified":"2025-12-05T16:01:14","modified_gmt":"2025-12-05T16:01:14","slug":"trump-is-threatening-to-get-rid-of-one-of-the-biggest-reasons-prices-have-remained-in-check","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/327310\/","title":{"rendered":"Trump is threatening to get rid of one of the biggest reasons prices have remained in check"},"content":{"rendered":"

\n When President Donald Trump introduced his \u201cLiberation Day\u201d tariffs in April, many economists predicted<\/a> Americans would soon experience massive price increases. While inflation has ticked up<\/a> in the eight months that passed, it\u2019s been nowhere near levels initially projected.\n <\/p>\n

\n A big reason for that: Nearly everything from cars to toilet paper produced by America\u2019s top two trading partners, Mexico and Canada, has been exempt from duties if goods comply with the terms of a trilateral free-trade agreement known as the United States-Mexico-Canada Agreement (USMCA), which Trump inked during his first term<\/a>.\n <\/p>\n

\n But the deal, which replaced the North American Free Trade Agreement, is scheduled to undergo a review in July, and already Trump is signaling he wants out. If that happens, it likely would usher in a floodgate of higher prices from which Americans have so far been shielded.\n <\/p>\n

\n \u201cWe\u2019ll either let it expire or we\u2019ll maybe work out another deal with Mexico and Canada,\u201d Trump said Wednesday. US Trade Representative Jamieson Greer also said in a Politico interview, \u201cthe reason why we built a review period into USMCA was in case we needed to revise it, review it or exit it.\u201d\n <\/p>\n

\n The president\u2019s stance could change between now and July, and the White House told CNN that. \u201cDiscussion about what hypothetical trade deals that have not yet been negotiated could look like is meaningless speculation,\u201d spokesman Kush Desai said.\n <\/p>\n

\n Prior to Trump\u2019s second term, goods from Mexico and Canada essentially entered the US duty-free even if they weren\u2019t USMCA compliant because there weren\u2019t tariffs in place. But Trump introduced tariffs of 25% on non-USMCA-compliant products from Mexico and 35% from Canada.\n <\/p>\n

\n Unlike those two countries, every other nation\u2019s exports to the United States have been subject to higher tariffs over the past year, barring exemptions for certain goods. Those rates at one point went as high as 145% in the case of China.\n <\/p>\n

\n Prior to Trump\u2019s second term, goods from Mexico and Canada essentially entered the US duty-free even if they weren\u2019t USMCA compliant because there weren\u2019t tariffs in place. That helps explain why 38% of imports from Canada and 49% of imports from Mexico were USMCA compliant last year, according to US Commerce Department data. But as of August this year, those shares rose to nearly 86% of imports from Canada and 87% of imports from Mexico.\n <\/p>\n

\n \u201cIncreased compliance with USMCA has shielded billions of dollars\u2019 worth of imports from the new tariffs,\u201d said Erica York, vice president of federal tax policy at the conservative-leaning Tax Foundation.\n <\/p>\n

\n If USMCA exemptions weren\u2019t in place, \u201cAmericans would face significantly higher prices,\u201d she said. \u201cThat would make American workers poorer and American businesses less competitive, and for no good reason.\u201d\n <\/p>\n

\n Consumer electronics and cars are among the goods that could be most vulnerable to price increases, given that the United States has become more reliant on its neighbors for such items.\n <\/p>\n

\n Additionally, supply chains across all three countries have grown more intertwined<\/a>, with components often crossing the American border multiple times during the assembly process. That means that even cars and electronics, as well as other domestically produced goods, could be impacted by potentially higher tariffs on Canadian and Mexican goods and get passed on to consumers.\n <\/p>\n

\n \u201cUSMCA is a cornerstone of North America\u2019s electronics manufacturing ecosystem. Terminating it would disrupt the production system that US manufacturers rely on, leading to longer lead times and higher input costs,\u201d said Chris Mitchell, vice president for global government relations at the Global Electronics Association. \u201cThose pressures would ultimately translate into higher prices for automotive, consumer, and medical electronics.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"When President Donald Trump introduced his \u201cLiberation Day\u201d tariffs in April, many economists predicted Americans would soon experience…\n","protected":false},"author":2,"featured_media":327311,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":{"0":"post-327310","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/327310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=327310"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/327310\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/327311"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=327310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=327310"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=327310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}