Advertisement

Trump concedes tariffs will bring 'some pain,' but the 'results will be spectacular'

By Allen Cone
Cranes load containers onto trucks at the Port of Los Angeles in Los Angeles on December 3, 2024. Photo by Allison Dinner/EPA-EFE
1 of 2 | Cranes load containers onto trucks at the Port of Los Angeles in Los Angeles on December 3, 2024. Photo by Allison Dinner/EPA-EFE

Feb. 2 (UPI) -- President Donald Trump on Sunday said there may be "some pain," yet the "results will be spectacular," one day after signing executive orders on tariffs against Canada, Mexico and China linked to the fentanyl crisis.

Trump's orders will impose 25% tariffs on goods imported from Mexico and Canada, and 10% on Chinese items. Canada's energy exports to the United States are subject to a 10% tariff instead.

Advertisement

In all caps he posted on Truth Social on Sunday morning: "THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE - AND THE RESULTS WILL BE SPECTACULAR!!!"

Advertisement

The National Retail Federation estimated up to $7,600 in additional costs per U.S. household annually if Trump's tariffs are imposed. They include the price of cars, housing materials, home goods, distilled spirits, fresh food and energy.

The average price of a car will rise by $3 million with sales falling by a million yearly because of the tariffs affecting Canada and Mexico, according to Mexico's National Auto Parts Industry Association.

The group group also warned supply chains will be disrupted with scarcity of items.

Canada and Mexico account for over a quarter of all U.S. imports.

Trump signed the three executive orders at his Mar-a-Lago private club in Florida.

Nations fight back

Canadian Prime Minister Justin Trudeau then announced "25% trade tariffs against $155 billion worth of American goods. Mexican President Claudia Sheinbaum said her nation will implement a "plan B," which includes retaliatory tariffs.

Trudeau's office said Sunday both nations' leaders spoke Saturday and "agreed to continue working together in areas of common interest and to enhance the strong bilateral relations between Canada and Mexico."

Canada on Sunday posted a full list of products affected by its tariffs on $30 billion worth of American goods, including produce, alcohol, apparel, household appliances, tools, firearms.

Advertisement

China's Ministry of Commerce on Sunday said China will file a lawsuit with the World Trade Organization and "take corresponding countermeasures to safeguard its rights and interests." The statement noted the United States is "ineffective in solving its own problems," including fentanyl use, but also undermines normal economic and trade cooperation between China and the United States."

The three nations are the United States' largest trade partners.

In a lengthy post, Trump wrote: "The 'Tariff Lobby,' headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA. THOSE DAYS ARE OVER! The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we're not going to be the "Stupid Country" any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example?"

Advertisement

Like during his inauguration speech Jan. 20, he called it the "golden age of America."

In a later post, he took aim at Canada.

"We pay hundreds of Billions of Dollars to SUBSIDIZE Canada. Why? There is no reason. We don't need anything they have. We have unlimited Energy, should make our own Cars, and have more Lumber than we can ever use. Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada - AND NO TARIFFS!"

Trudeau told Americans the tariffs "will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities." And Canadians will need to be "checking the labels at the supermarket and picking Canadian products, opting for Canadian rye over Kentucky bourbon, or forgoing Florida orange juice altogether.

"It might mean changing your summer vacation with plans to staying here in Canada."

White House Press Secretary Karoline Leavitt said Friday tariffs can be a good thing:

"I think Americans who are concerned about increased prices should look at what President Trump did in his first term," Leavitt said. "He effectively implemented tariffs and the average inflation rate during the first Trump administration was 1.9%."

Advertisement

Vice President JD Vance said on Fox News: "We still have, thank God, the biggest economy in the entire world, the best people and the best workers, but the message from President Trump to the entire world is very clear, we are done being taken advantage of, and we have a president who looks out for the interest of American citizens."

What it means

In the United States, tariffs are collected by Customs and Border Protection agents at 328 ports of entry.

Trump has claimed that tariffs would help raise "trillions and trillions of dollars" from foreign governments.

But foreign companies aren't responsible for paying the duties.

These extra costs can be passed on to consumers. Some U.S. businesses could absorb some of the tariff costs. The tariffs could have a significant impact on the cost goods sold in America. That includes vehicle parts, even for cars made in the United States, and food imported from Mexico.

Tariff proponents have argued that levies can help protect manufacturers here at home by opting to buy U.S.-made products rather than newly pricier imports. Or companies may choose to open new plants in the U.S., including automakers.

"Come make your product in America," Trump said last week virtually at the annual World Economic Forum gathering in Davos, Switzerland. "But if you don't make your product in America, which is your prerogative, then very simply you will have to pay a tariff."

Advertisement

The Peterson Institute for International Economics said tariffs "have a poor record" of sparking a resurgence in manufacturing.

Some some products are not made in the United States, including toys, clothing and electronics.

About 80% of the toys imported to the United States come from China.

The extra costs for products could be inflationary, from about 2.9% currently to as high as 4%, or about double the Federal Reserve's 2% target, Capital Economics noted.

It said in its report last week that "imposing any of these suggested tariffs would generate a rebound in consumer price inflation this year, taking it further above target and making it harder for the Fed to resume loosening monetary policy."

What experts say

The headline on a Wall Street Journal editorial on Saturday was: "The Dumbest Trade War in History."

"Mr. Trump's justification for this economic assault on the neighbors makes no sense," the newspaper wrote.

It added: "Drugs may be an excuse since Mr. Trump has made clear he likes tariffs for their own sake, pointing to Trump's comments on Thursday that the US doesn't need oil or lumber from its neighbors.

"Mr. Trump sometimes sounds as if the US shouldn't import anything at all, that America can be a perfectly closed economy making everything at home," the editorial continued. "This is called autarky, and it isn't the world we live in, or one that we should want to live in, as Mr. Trump may soon find out."

Advertisement

Larry Summers, treasury secretary under President Bill Clinton, described impending tariffs "a self-inflicted supply shock.

"It means less supply because we're taxing foreign suppliers. And that will mean higher prices and lower quantities," Summers told CNN. "This is a self-inflicted wound to the American economy. I'd expect inflation over the next three or four months to be higher as a consequence, because the price level has to go up when you put a levy on goods that people are buying."

Jamie Dimon, CEO of JP Morgan, the world's largest bank, said last week that tariffs are "an economic tool" or "an economic weapon," depending on how they're used.

Dimon said on CNBC: "I would put in perspective: If it's a little inflationary, but it's good for national security, so be it. I mean, get over it."

Other corporate leaders generally panned the orders, according to a CNBC report.

David French, the National Retail Federation's executive vice president of government relations, said: "Imposing steep tariffs with three of our closest trading partners is a serious step, and we strongly encourage all parties to continue negotiating with the appropriate seriousness to avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses."

Advertisement

Shawn Fain, president of the United Auto Workers Union, said: "We do not support using factory workers as pawns in a fight over immigration or drug policy. We are willing to support the Trump Administration's use of tariffs to stop plant closures and curb the power of corporations that pit U.S. workers against workers in other countries.

"But so far, Trump's anti-worker policy at home, including dissolving collective bargaining agreements and gutting the National Labor Relations Board, leaves American workers facing worsening wages and working conditions."

Jay Timmons, president and CEO of the National Association of Manufacturers, said a "25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally.

"The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs.

"These businesses -- employing millions of American workers -- will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk."

Latest Headlines