If American voters reject Donald Trump's hopes to get rid of a higher price, his recent threat to the three largest trading partners in the United States may make them think again.

On February 1st, Saturday, Trump announced that 25 % of tariffs were imposed on Canada and Mexico, and 10 % tariffs were imposed on China. He said that he would take effect on Tuesday, February 4. Although the market has paid new news to some extent, they still see the steep pre -sale selling on Monday, February 3, and then fluctuated in the morning.

Although Canada and Mexico conducted a one -month negotiation on Monday, new tariffs on China were just on February 4 (Tuesday results ".

Given that I am a training as an economist and a professor of finance, I think Trump can be correct in this score. In fact, if tariffs come into effect, they may cause disaster for the Fed's reduction of inflation.

From grocery stores to houses

American consumers may be surprised to find that if they continue in March, almost every economic sector will be affected by such opening tariffs. In 2024 imported from Mexico and Canada, Mexico and Canada's imports were close to $ 1 trillion, which was almost twice that of the United States imported from China.

The United States depends on Mexican's fresh fruits and vegetables, as well as Canadian wood. Therefore, if the tariffs come into effect, Americans who have been waiting for house prices may continue to wait, because the tariffs of wood and other building materials may make the affordable housing tighten and deteriorate. Moreover, we should not even talk about avocado prices.

At the same time, 10 % tariffs on Chinese goods may increase the price of electronic products, and China has taken revenge. Trump also proposed a 25 % tariff on Taiwan and its semiconductor industry to try to promote Taiwan companies to invest in the US manufacturing industry. If the tariff is effective, the price of American consumers will be higher.

Any tax of any other name ...

Tariffs are import tax. They pass the supply chain in a higher price and eventually pay by consumers. Traditionally, the government uses tariffs as fiscal tools, encouraging enterprises and consumers to get rid of foreign products and support domestic enterprises.

Theoretically, new tariffs can encourage foreign companies to invest in the United States and create more things on US soil. Unfortunately, since the 1980s, the domestic manufacturing system has declined, leading to low prices of consumers, but seriously limited the products produced by the United States. At least in the short term, American consumers will eventually be imported to Canada, Mexico and Chinese products.

Although this round of tariff threats seem arbitrarily for some people, the Trump administration stated that it believes that tariffs and national security issues are deeply intertwined. Trump Chairman's Economic Advisory Committee Chairman Stephen Miran proposed a way to Trump's tariff plan, saying that this was to make the American industry and other parts of the world fair.

In the long run, it is unclear whether Trump's threatening trade war will bring domestic manufacturing back to the United States and start a new industrial revival. At the same time, American consumers may be trapped with a bag.