Tariff storm hits, American importers suffer, or lose 1.2 billion yuan every year

On November 25, 2024, US President-elect Trump announced on social media that he planned to impose a 25% tariff on all imports from Mexico and Canada and a 10% tariff on China goods.  This statement undoubtedly once again dropped a blockbuster on the global trade market and stirred up thousands of waves in the field of international trade. 

Authoritative calculations show that if this tariff plan is implemented, US importers will face estimated losses of up to US $1.2 billion per year.  Looking back at Trump's trade war with China in his first term, U.S. importers spent $350 million a year on tariffs, and the policy remained unchanged during Biden's term.  For example, in 2018, the United States imported a large amount of mechanical and electrical products from China. Due to the increase in tariffs, the costs of related importers increased significantly. Many small and medium-sized enterprises faced capital turnover difficulties, and some enterprises were even forced to cut orders by 30%. 

According to the trade data in 2023, the United States imported 271,505 tons of seafood from Canada, worth US $3.6 billion. The tariff increase will generate an additional burden of US $890 million, and lobster, salmon and other industries will be greatly affected.  The United States imports 77,995 tons of seafood from Mexico, worth $1.5 billion, and a 25% tariff would cost $162 million.  The United States imports 335,995 tons of seafood from China, worth US $1.5 billion. The previous 25% tariff has already cost importers nearly US $220 million. An additional 10% will increase the annual tax by US $153 million, especially in the frozen tilapia industry. 

Some imported seafood had tariff exemptions, such as cod and wild salmon imported by the United States from China in 2023, with low tariff payments, highlighting the uncertainty of U.S. trade policy. 

Economists warn that the tariffs will fuel inflation in the United States and that the average household could lose more than $2,600 a year.  In financial markets, Trump's remarks made the US index rise, the Canadian dollar fell 1.2% against the US dollar, the Mexican peso fell 2% against the US dollar, and the offshore RMB quoted above 7.26 against the US dollar, showing a strong market reaction. 

Trump's move seems to be for the benefit of the United States, but it is not.  U.S. importer costs have soared, industrial supply chains have been disrupted, and consumer prices have risen.  Export industries of trading partners such as Canada, Mexico and China have been hit and bilateral economic and trade relations have been strained.  Globally, trade protectionism is on the rise, the multilateral trading system is under attack, and the world economy recovers or is blocked.  All countries need to work together to maintain the free trade order, overcome difficulties together and prevent global trade from falling into deeper difficulties.