Canadian Energy and Resources Minister Jonathan Wilkinson on relations with the United States and business talks between Prime Minister Trudeau and President Donald Trump.
President Donald Trump The attempt to impose or threaten higher tariffs for countries such as China, Canada and Mexico – three major US business partners – have raised questions about tariffs and how they affect consumers.
Trump signed last weekends to impose 25 % import tariffs from Canada and Mexico last weekend, and the 10 % tariff rate is imposed on Canadian energy products. The tariffs were delayed at least a month after Canada and Mexico declared measures to counter drug trafficking and illegal immigration at their borders with the United States.
He also increased tariffs on goods imported from China by 10 % across the board. The tariffs were implemented on February 4, and the Chinese government announced retaliatory tariffs on some US energy exports and took other punitive measures, including an anti -monopoly Google probe and rare export restrictions.
The tariff is tax It belongs to imported goods and services. While they have historically played an important role in helping federal tax revenue, developed countries have been relieved of tariffs as the main source of budget and in other forms of tax – such as income, salary or sales tax – have been transferred.
What happens to Trump's tariffs in China, Canada and Mexico?
President Donald Trump has raised tariffs on Canada and Mexico as well as Canada, which he cited as a response to Fentanil from those countries to the United States. (Photo by Chip Somodevilla / Getty Images / Getty Images)
After the end of World War II, the World Trade System was transferred to a law -based format for tariffs initially established in 1947, which later became part of the World Trade Organization. (WTO) said in 1995 Congress Research Service.
The system created by GATT and WTO has created rules that govern the use of tariffs in business partners as well as resolving disputes and preventing trade wars – when countries enter the cycle of retaliatory tariffs on each other. , Created.
This has contributed to the decline in the global tariff rate as well as the expansion of markets for US exporters. As CRS noted, US exports have been adjusted more than 160 % for inflation since the establishment of WTO.
Voters reject Trump's tariff pressure. Most of them believe that policy will harm the economy
A sign that “Canadian Buying instead” is displayed on top of the bottles, and is near another sign that “American whiskey” reads about Trump's announcement of Canadian goods tariffs. (Reuters / Chris Helgrene / Reuters)
Who will pay for tariffs?
Companies that import products that are subjected to tariffs Tariff fee When these goods enter the importer country.
In the United States, tariffs are collected by the Customs Agency and the Border Protection Agency (CBP), which is a subsidiary of the Home Department of Security. Trump offered to make “creation”Foreign Income Services“It will be responsible for collecting tariffs, though it is unclear whether the plan will move forward.
Tariffs increase the price of a product to the importer company, which then decides whether to raise prices paid by consumers to maintain their profit margin or keep prices relatively constant and cost. Attracts tariffs in their lower line.
In some cases, the export company may seek to maintain its market share by lowering its price to help importers in the face of tariff costs – although their desire to do so depends on the demand for a product that is subject to tariffs.
Canada announced border security measures that led Trump to delay its tariff on Canadian goods at least one month. (Camara Morozuk / Bloomberg via Getty Images / Getty Images)
“It really depends on the sensitivity of the product price,” said Brandon Parsons, an economist at the Pepperdine University School of Graziadio University.
“For a manufacturer with a lot of leverage – consumers really want to buy their product and there is illegal demand like the iPhone – they can only raise the price and consumers are still paying it, Parsons said : The iPhone has its market share. “
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“Other products where consumers are more sensitive and there are many alternatives, so there is a lot of competition, so it can be that manufacturers just want to reduce their margins. So they keep prices the same They are so “don't lose market share again, don't miss demand, but you just eat a little bit of food, so their overall profitability decreases. “