What is a tariff? Three ways Trump’s tariff on Mexico and Canada would impact Michigan

Beyond the car sector, Michigan’s economy could suffer greatly from impending 25% tariffs.

• • 
    President Donald Trump agreed to delay tariffs against Mexico for one month
    
  • 
    Tariffs against Canada and China are expected to go into place on Tuesday
    
  • 
    The tariffs could lead to drastic increases in prices in Michigan
    

• 
  President Donald Trump agreed to delay tariffs against Mexico for one month
  
• 
  Tariffs against Canada and China are expected to go into place on Tuesday
  
• 
  The tariffs could lead to drastic increases in prices in Michigan
  

DETROIT (FOX 2):Michigan may suffer a severe financial blow in a number of ways as President Donald Trump’s proposed tariffs are put on hold for at least a month.

Trump’s proposed tariffs will affect Michigan’s farming and automotive industries, but state lawmakers are becoming increasingly concerned about them.

The backstory

since the nation south of the United States has declared that it will immediately bolster the border with 10,000 National Guard personnel.

On Monday, that announcement was made. After several hours,

In order to impose 10% levies on all imports from China and 25% on imports from Mexico and Canada, Trump declared an economic emergency. On Tuesday, the tariffs were supposed to take effect.

Canada and Mexico have ordered retaliatory duties, although Mexico is delaying its own for the time being as the two nations continue their trade and security negotiations.

China’s Ministry of Commerce announced that it would take action to protect its rights and interests and bring a complaint against the U.S. for the “wrongful practices” before the World Trade Organization.

On social media, Trump announced that he had a conversation with Canadian Prime Minister Justin Trudeau on Monday morning and would “be speaking to him again at 3:00 P.M.”

Trump has pledged to enact further import levies.

DEARBORN, MICHIGAN – APRIL 11: On April 11, 2024, in Dearborn, Michigan, the new Ford F-150 vehicle passes through the assembly line at the Ford Dearborn Plant. Today, the brand-new Ford Ranger trucks and the F-150 were both unveiled in a festive event.

What is a tariff?

Overview:

. Raising the cost of imported goods and services is intended to deter consumption and encourage consumers to buy more domestic items in order to boost the economy of the country.

In order to replace imported items with domestic ones and increase government revenue, the goal is to promote greater local production.

U.S. presidents frequently enact protectionist policies, such as high tariffs, early in their administrations, according to an article published in the Journal of Economic Perspectives.

Trump levied tariffs ranging from 10% to 50% on $283 billion worth of US imports in 2018. China, Russia, Canada, Mexico, and the EU were among the nations that responded by bringing claims against the United States at the World Trade Organization. Many of those nations also imposed their own tariffs in retaliation.

How will Michigan be affected by new tariffs?

Farmers, Michigan’s auto sector, and the state’s budget surplus may all suffer.

Last December, Governor Gretchen Whitmer expressed her concern about the car industry.

In December, Whitmer stated, “That’s the nightmare scenario for all of us,” just before Trump took office.

Look more closely:

Every vehicle part imported into the United States from Canada or Mexico will be subject to a levy by the federal government. These components end up on the assembly line, and the price of the car increases as the part does.

When the cars are finished and placed on the lot, sticker shock will result. Reduced sales and, ultimately, decreased profitability result from customers turning away.

Whitmer contends that there is no benefit to this.

The fact that the automobiles we purchase, which are manufactured in Michigan, are shipped back and forth from China and other areas of North America will make things much more challenging for our auto sector. We must keep that in mind,” Whitmer stated.

Farmers in Michigan are already concerned that the President’s harsh deportation campaign would result in the loss of migrant farmworkers. The Agri-Business Association of Michigan’s Chuck Lippstreau said the tariffs might affect the cost of everything in the store.

“In the end, tariffs on food, products, and agriculture will raise prices. Every family in Michigan should be mindful of that issue, Lippstreau stated.

Farmers are concerned that this may result in less produce available for sale, which would reduce sales and profits.

“That does hurt the farmers’ opportunity to be successful and grow their economy long term,” said Lippstreau.

In all of this, Michigan residents are the third possible loser. There will be less money available for state services and programs if fewer revenues are coming into the state coffers.

Whitmer has already hinted at the possibility of cutting her new budget.

“be all worth the price that must be paid” in the end.

The Source: Lansing insider on FOX 2 For this report, Tim Skubick spoke with Lippstreau and Governor Whitmer. This article’s content was sourced from earlier reporting by FOX Television Station, including FOX5NY.com and LiveNOWfromFOX.com.