Shannon K. O'Neil and Julia Huesa
On February 4, President Donald Trump imposed 10 percent tariffs on China, after reaching last-minute agreements with Canada and Mexico to delay tariffs by thirty days. Trump’s tariffs on Chinese imports come as punishment for Beijing’s failure to rein in the smuggling of fentanyl precursor chemicals, while the stay on tariffs for Ottawa and Mexico City comes after both countries promised greater cooperation on combatting drug smuggling. China has responded with 15 percent tariffs on U.S. coal, gas, and other goods, as well as restrictions on some minerals exports and the launch of an antitrust investigation into Google.
Here are nine graphics that show the potential economic effects of such tariffs on all four countries.
How could tariffs affect the United States?
Nearly half of all U.S. imports—more than $1.3 trillion—come from Canada, China, and Mexico. However, analysis by Bloomberg Economics shows that the new tariffs could reduce overall U.S. imports by 15 percent. While the Washington, DC-based Tax Foundation estimates that the tariffs will generate around $100 billion per year in extra federal tax revenue, they could also impose significant costs on the broader economy: disrupting supply chains, raising costs for businesses, eliminating hundreds of thousands of jobs, and ultimately driving up consumer prices.
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