At the beginning of the week, the future US President Trump announced that he would impose higher import tariffs on the most important trading partners. In the USA there are fears that this will happen primarily to the detriment of consumers.
“For me the most beautiful word in the dictionary is: protective tariff!” Donald Trump expresses at every opportunity how much he enjoys using the term “tariff”. Protective tariffs, he enthuses, are music to his ears.
Trump repeatedly sang the song about an employment boom caused by making cheap imports more expensive during the election campaign. Now he apparently wants to get serious: protective tariffs of 25 percent are to be imposed not only on goods manufactured in Canada or Mexico, but also on products manufactured in the USA in which parts manufactured abroad are installed.
If these preliminary products are manufactured in China, an additional ten percent will be added, according to the threat: “If you don’t manufacture your product here in Germany, then we will impose a painful protective tariff on you!”
Trump merchandise from China
But who will ultimately bear these additional costs? A question that is now also being taken up by America’s comedians. “If you want a tie from the Donald Trump collection, buy it quickly or it will be ten percent more expensive,” joked late-night talker Jimmy Kimmel this week. An allusion to the fact that Trump fan items are also made in China.
“Almost everyone who knows anything about economics thinks protective tariffs are a terrible idea,” scoffs Kimmel: “Trump’s stupidest idea since he fathered Don Jr.!” This is Trump’s eldest son, a popular target for satirists.
Americans fear rising prices
It has long since dawned on America’s consumers that they could pay the tariff bill. Especially since reports can be seen on television every day, like the one from CBS about Debbie Kavourias, owner of the hardware store “Columbus Hardware” in New York. “Our prices would skyrocket,” fears Debbie: “Everything from China, Mexico or Canada would become more expensive, which we would have to charge our customers for.”
According to a current Harris Polls survey, 69 percent of Americans – a good two thirds – expect that Trump’s tariff plans will lead to higher consumer prices at home – including for food.
Expensive fruits and vegetables
“One of Trump’s central campaign promises is to reduce inflation and food prices,” warns Lance Jungmeyer, president of the Fresh Produce Association of the Americas, on NPR radio. With protective tariffs you can achieve the opposite. About a third of the vegetables and fruits consumed in the United States come from Mexico and Canada.
The US auto industry, which uses numerous parts made in Mexico, is also expecting higher manufacturing costs. Accordingly, US auto stocks have already declined this week.
Are avocados becoming scarce?
However, the fear of price increases may be unjustified for a completely different reason: Trump expressly sees the protective tariff announcement as a threat that can be avoided. If the affected countries stop drug and human smuggling into the USA, they may be spared.
Republican Rep. Derrick Van Orden of Wisconsin argued on CNN that he’s happy to pay more for guacamole if it means less lethal fentanyl enters the country. Because there is also this fear going around: that shortly before the Superbowl – the day on which record amounts of guacamole are eaten in the USA – the prices for imported avocado could skyrocket.
