March 3, 2025
President Trump’s tariff threats are becoming a reality tomorrow.
Stocks took a dive– dropping almost 650 points today. Why? Well, because of this.
President Trump confirmed this afternoon that he is going forward with those 25% tariffs on Canada and Mexico and moving forward with an additional 10% tariff on China bringing that total to 20% starting tomorrow. Today’s stock market drop has wiped out all the gains the market made since Trump took office and marked the lowest point for stocks since December. In case you aren’t picking up the hint – investors do not like tariffs. But trump said unlike last month when he first tried to enact these tariffs this time he’s not backing down and there’s nothing Mexico, China or Canada – or it seems wall street — can do to stop him.
Here’s the thing — both Mexico and Canada and even China have said that if Trump goes ahead with these tariffs – they will retaliate with tariffs on US imports going into their countries which would of course hurt US suppliers of those goods.
And that’s not all – president trump said today – his is also going to impose reciprocal tariffs April 2nd. Reciprocal tariff is a matching tariff placed on imported goods into the United States. So if -for example – France puts a 25% tariff on a US import into their country, the US would slap a 25% tariff on a French import coming into this country. On top of that president trump says he will slap tariffs on all agricultural goods being imported into the United States.
Look – I have done multiple deep dive videos on tariffs and these are the facts.
One –the other country; Mexico, China, Canada or any other country generally does not pay for the tariff. In the end — you, the consumer pay for the tariffs. President trump has acknowledged this.
Two — according to the US government Mexico, China and Canada are the countries we import the most stuff from. Let’s start with food — according to the USDA — Canada and Mexico are the united states’ first and third largest suppliers of agriculture products. Mexico supplies the United States with 31% of its fruit, vegetables and alcoholic beverages. Most of our avocados and tomatoes come from Mexico. And Canada is a major source of grains and meats.
Speaking of Canada – let’s talk about oil. According to the United States energy information agency – from June to November of 2024 the United States imported an average of more than 140 million barrels of crude oil per month from Canada which of course gets refined into the gasoline you put in your car. That is almost four times the amount of oil we imported from all of OPEC+ countries combined in that same time period. So yeah – we get a most of our oil from Canada. For the record, we also get oil from Mexico, but it’s less than what we import from OPEC+.
Let’s talk about cars and trucks. We get a large number of those from Canada and Mexico and adding a 25% tariff could not only raise the price of new cars – but could also jack up the price of used cars already being sold in this country because the demand for those would go up. We also get a lot of our plastics, furniture, pharmaceuticals and as I mentioned, lumber from Canada. And from Mexico, we import a lot of other types of machinery and electronics. All of those things could be subject to that 25% tariff.
Fact three – we import a lot of components that are included in products we use every day. Things you wouldn’t even think of. For example an electronic component that goes into your gaming console may come from Mexico even if the console itself is physically assembled here in the United States. Well – that component is going to cost more for the American company to import and usually that means the cost of the entire console goes up which means you are probably going to have to pay more for it. And that goes for a lot of things you use every single day that you might not even realize.
Fact four — even if something you use has a made in America label that doesn’t mean it’s fully made in America and therefore immune from these tariffs. According to the federal trade commission in order for a company to be able to slap the made in America label on their product, it has to be “all or virtually all” made in this country. Components of a made in America labeled product can absolutely be imported from other countries.
And fact five – yes – there was a point in our country’s history where the revenue from tariffs made up a lot of the income the United States needed. But that was like a century ago. The world is different now. Technology has made our supply chain global. And labor costs in the United States are far higher than they are in other countries. That makes it less likely that every single American company would start manufacturing every single product here in the United States. For most of them it’ll probably be easier and cheaper for them to import the cheaper good, pay the high tariff and then just charge you more.
