Donald Trump's trade rates for Canada, Mexico and China have visually explained | News to explain

The United States have delayed It plans 25 percent tariffs for Canadian and Mexican imports up to a month, after 11 hours of calls between President Donald Trump and Canada and Mexico leaders on Monday.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Shainbaum have agreed to strengthen border security to prevent drug and migrants in the United States, preventing a trade war for now.

But the 10 percent tariffs for Chinese goods entered Tuesday, attracting revenge measures from Beijing. Chinese goods have already been subjected to previous tariffs, starting from Trump's first term between 2017 and 2021.

The US Tariff War, the second largest goods trader in the world after China, shook markets around the world. From January to November 2024, the value of goods Traded between the US and the world reached $ 4.88 trillion, with $ 2.98 trillion exports and $ 1.90 trillion imports.

The best trading partners in the United States – Mexico, Canada and China – represent over 40 percent of total goods traded, valued at more than $ 2 trillion.

What are the tariffs and how do they work?

The tariff was imposed by the government tax on imported goods and services paid by enterprises that bring them into the country. Designed to protect internal industries, tariffs often increase consumers cost by making foreign products more expensive, potentially reducing demand.

For example:

• A Chinese exporter sells a pair of US importer jeans for $ 10.
• The US government imposes a 10 percent tariff for Chinese products.
• The US importer will now have to pay an additional $ 1 dollar to the Federal Dening Government, increasing its costs to $ 11.
• After adding costs and profits, jeans will be sold for $ 20.
• The US user is likely to pay more for jeans.

What does the pause for tariffs in Canada and Mexico mean?

Following talks with Trump, Mexican President Shainbaum and Canadian Prime Minister Trudeau have made commitments to strengthen security within their shared borders with the United States.

“I was just talking to President Claudia Shainbaum of Mexico. It was a very friendly conversation where she agreed to immediately deliver 10,000 Mexican soldiers to the border, dividing Mexico and the United States, “Trump wrote to Truth Social on Monday.

Following his call with Trump, Trudeau has announced that Canada will move on with his earlier outline $ 1.3 billion border plan, while committing to appoint Fentanil King and officially defines the cartels as “terrorist” organizations.

“In principle, it is very good news that tariffs were pauses and Canada must do everything possible to engage with Trump – work on border security issues, etc.,” said Najibula, vice president, research and strategy in the Asia -Tihoetan Foundation of Canada, in front of Al, in front of Al Jazeera.

“But beyond the immediate crisis, we have to work on structural issues that led to this over -dependence from the United States. We need to build export capacity (in places other than us) and invest in our own competitiveness, “Najibula added.

Are tariffs a new idea?

No, the tariffs have been used by several countries before. Historically in the United States from 1790 to 1860, tariffs produced 90 percent of federal revenue.

Tariffs can also be used to “punish” a foreign manufacturer of goods for not complying with international commercial practices. In 2018, the United States began setting up to Chinese goods worth hundreds of billions, citing unfair commercial practices and intellectual property theft. This marks the beginning of the trade war in the US and China, where objects such as semiconductors, batteries and electronics as washing machines were taxed.

In the same year, Trump also introduced a 25 percent leak on steel and a 10 percent aluminum tariff, affecting a number of countries, including Canada, Mexico, India, Brazil and Argentina.

Why are tariffs used?

Tariffs are often used to protect certain internal industries from foreign competitors. This happens by increasing the price of these imported goods. The concept behind tariffs is that buyers will choose home products over expensive foreign imports, which in turn will help the domestic industry grow. However, this is not always the case.

For example, to produce the United States – 90 percent of which are imported from Mexico – it would be a long and difficult feat, given that avocados are produced in only three states: California, Florida and Hawaii.

Why did Trump impose tariffs?

During the Trump presidential campaign, he promised to impose tariffs on US tall trading partners in revenge for undocumented migrants and drug flow, especially fentanyl.

Trump also stressed that he uses tariffs as a means of strengthening domestic production and promoting foreign business to create factories in the United States.

Tariffs are also used to generate a state revenue with the additional tax income imposed on imported goods used for public expenses. For example, in 2019, $ 79 billion in rates were generated in tariffs, they double the value of 2017, according to the Brookings institution. However, the bigger part of this weight was handed over to consumers who paid higher prices.

“In 2018-2020, President Trump mainly uses rates as a negotiating chip,” Najibula told Al Jazeera. “This time, the motivations look wider, including the desire to return more production in the United States, displace the tax burden of taxes on income and rates, and use tariffs both as a lever and as a penalty. We are looking at a bigger scale than we saw at Trump's first term. “

What products will be affected by tariffs?

A number of goods will be heavily affected by Trump's tariffs. Based on what the US is most imported from Canada, Mexico and China, this will include items such as cars, fuel, computers and electrical equipment. Nutritional items such as avocado are also likely to see an increase in prices.

What were the rates Trump had planned to impose Canada, Mexico and China?

Trump has signed three executive orders that set 25 percent tariffs for all Canada and Mexico goods, as well as a 10 percent tariff for Canadian oil and an additional 10 percent tariff for Chinese goods.

Canada is a large exporter of raw oil with 97 percent of the exports of raw oil that goes to the United States in 2023, while Mexico exports a large amount of products such as fruits and vegetables, as well as automotive parts.

China is a major exporter of electrical equipment and electronics, including chips, laptops and smartphones.

What are the retributed tariffs?

Canada, Mexico and China have said they will react with retributed tariffs. Trudeau had said on Saturday that the 25 percent tax would be hit on a murder from us, which are subsequently with Powers.

Beijing criticized the last tariff, saying it would cause tariffs in the World Trade Organization (WTO), an intergovernmental body responsible for regulating international trade. China is placed counter-tarifi on the American import, which will come into force on February 10.

What tariffs are already imposed on China?

According to Section 301 of the US Trade Act of 1974, US Trade representatives have the right to counteract unfair trade practices from foreign countries. This is at the heart of Washington's trade war with China since 2018, when tariffs were placed on the largest exporter in the world.

In a significant move, the Biden administration expanded these rates in September 2024 to targeting items such as electric vehicles, batteries, semiconductors and solar panels, with taxes varying between 25-100 percent.

Can tariffs lead to a trade war?

“It seems that there is a temporary pause for the rates against Mexico and Canada. However, the tariffs for China are likely to come into force on February 4, and President Trump signals additional tariffs against the EU and others. So yes, we could focus on a trade war, “Najibula told Al Jazeera.

“In response, countries are likely to adopt a number of strategies – from direct revenge to hedging their trade relations between the US, China and other partners. Globally, we can expect inflationary effects and significant interruptions to supply chains. “

Will this increase inflation?

– Yes. Both the tariffs themselves and all mitigation measures – such as subsidies or support programs for the affected sectors – will contribute to inflation, “Najibula said. “The higher prices associated with tariffs combined with the cost of removal efforts will lead to overall inflation pressure.”

What can users do to protect/plan this?

“Where possible, buying local products and avoiding a particular import can help consumers manage increasing costs,” Najibula told Al Jazeera.

But they cannot completely escape from the inflation pressure triggered by the Tariff War.

Will the prices of other items rise?

Yes, in most cases the price of the items will increase. It is not only final goods for products, but also capital goods, which would increase production costs and lead to higher costs for final products. In addition, the higher cost of raw materials and parts would increase prices through the supply chain.

According to an analysis by the Institute of International Economics of Peterson (PIIE), an American non-profit organization exploring the global economy, machines and electronics will face the largest import tax on imports-as they are mostly obtained from China and since they are currently facing a low tariff.

Other US imports from China, which are likely to be affected, will also include toys and sports equipment.

Who pays the price?

Ultimately, the user. US-based enterprises will face higher taxes. In most cases, the price of tariffs is indirectly harvested by consumers, as the import of enterprises is likely to increase the price of the mentioned goods for management of the imposed taxes.

“Consumers will absorb much of the weight through higher prices, but businesses will also feel the impact. Industries such as the Canadian and US automotive sector can be particularly affected, “said Najibula of the Asia-Pacific Foundation of Canada.

Can tariffs affect jobs?

In theory, the imposition of tariffs would encourage more domestic production, which in turn will require more employment. Similarly, if foreign companies are encouraged to transfer their factories to the United States, it will increase employment.

For example, after Trump imposed 20-50 percent of washing machines rates, more jobs were imported into two regions where appliances had not been manufactured before: Clarksville, Tennessee and Newberry, South Carolina.

In 2018, LG has completed an investment in a new smart factory in Clarksville, which will be staff with 700 employees. Similarly, in 2018, Samsung built a device for the production of appliances in Newberry, South Carolina, hiring 1,000 employees.

The US administration will hope that the last tariff war will encourage corporations to create more factories and businesses in the United States.