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  • February 18, 2025
‘We have to take it seriously’

‘We have to take it seriously’

President-elect Donald Trump is threatening new tariffs on multiple countries as his second term approaches, after making tariffs a signature of his 2024 presidential campaign. - Photo: Mario Tama (Getty Images)
President-elect Donald Trump is threatening new tariffs on several countries as his second term approaches, after making tariffs a signature of his 2024 presidential campaign. – Photo: Mario Tama (Getty Images)

President-elect Donald Trump’s tariff threats are just that – for now. But companies could face new costs as soon as next month if he sticks to his policy.

Although his ideas often varied in scope and scale, Trump has imposed blanket tariffs of up to 20% on imported goods, and up to 60% on China. In recent weeks he has been threatened Canada and Mexico, the country’s main trading partners, with tariffs of 25% and China with tariffs of 10% unless they meet its demands regarding illegal immigration and the flow of fentanyl into the US.

‘It’s a lot, and we have to take it seriously’ Chandri Navarrosenior advisor in Baker & McKenzie’s international business practice, said of the numerous proposals. “Because these are the kinds of threats he made before his first administration and then actually carried out,” apart from some. exceptions.

“It has to be taken seriously,” she added. “When he made those threats, many of us thought it was blunder and that there was no way he would put it into action – but he did.”

In 2018, Trump ordered high tariffs on Chinese products, including 30% on solar panels and electric vehicles, followed by 25% tariffs on steel and 10% on aluminum from most countries, sparking a trade war with China and angering several countries, including India And Canada.

In 2019, he proposed tariffs on all imports from Mexico “until” illegal immigration to the US ended. Those rates were averted days before they were to come into effect.

Collectively, Trump levied nearly $80 billion in new taxes on Americans in 2018 and 2019 through tariffs on thousands of products valued at $380 billion. according to the Tax Authorities. The trade war policies immediately increased tax collections by an average of $200 to $300 per household, the nonprofit said in June.

They were also bad for business.

Trump’s tariffs were associated with lower future profits, sales and employment for the companies whose stock prices were hit hardest, a recent study found. analysis from the Federal Reserve Bank of New York. Companies exposed to trade with China – roughly half of all listed companies – posted profits that were about 13% lower than others.

While many companies have reduced their exposure to China, almost all are dependent on global trade to some extent. For some, Trump’s tariffs could wipe out any profits they make on certain goods.

Tariffs on wine would destroy restaurants, which have “ridiculously low margins,” says DeWayne Schaaf, chef and owner of Celebrations, a fine-dining restaurant in Cape Girardeau, Missouri, told Quartz last month. Proposed tariffs on light vehicles would cost European and American carmakers money up to 17% of their combined annual incomeAccording to S&P Global (SPGI).