Trump’s Tariffs: What to Expect
With the recent election of President-elect Trump, tariffs have come back to the forefront of our country’s mind. One of Trump’s key campaign points was that he would raise tariffs on imported goods, especially Chinese imports, and he would do it quickly after returning to office. That has understandably gotten everyone discussing what it will do to the U.S. economy and how that will affect consumers.
So, let’s break down what we already know and what to expect in January when Trump is sworn in.
What we Know
President Trump has long been a fan of using tariffs as a policy tool. Dating back to his first term in office, he has advocated strongly for the use of tariffs, especially on Chinese goods and imports.
Beginning in 2018, President Trump imposed multiple rounds of tariffs on Chinese goods, ranging from steel and aluminum products to washing machines and solar panels. These tariffs affected more than $300 billion worth of trade. For all the debate leading up to the election about Trump’s use of tariffs, it should be noted that President Biden kept most of Trump’s tariffs in place and even raised tariffs on some Chinese goods.
Throughout his campaign Trump stated his intent to impose new tariffs and raise existing tariffs across the board. He has said he plans to impose 10-20% tariffs on all imports and tariffs of up to 60% on imports from China. He repeatedly mentioned his belief that these tariffs would punish foreign countries for unfair trade practices, while also promoting more American-made products.
What can we expect moving forward?
All indications are that Trump intends to move quickly in imposing these tariffs after he returns to office. Looking at his first term and his promises during his most recent campaign, we can safely assume he will take advantage of existing statutory provisions that will allow him to enact the tariffs without much process.
But seeing as trade is a two-way relationship, we can also expect other countries to respond in their own way to any potential tariffs. Retaliatory tariffs are certainly an option, but other countries could also simply reduce their business with the U.S.
In terms of specifics, though, nobody can truly forecast the short- or long-term impact until Trump is sworn in again. The exact amount and timing of any of this is still relatively unknown, making it difficult for anyone to accurately forecast the repercussions. While we can (and should) expect other countries to respond in kind, it remains to be seen what the action and reaction will be in the first quarter of 2025.
Other Factors to Monitor
Even though the ILA and USMX came to terms on a temporary wage agreement earlier this year, they only extended their negotiating window for a new master contract. The extension takes the parties to January 15, 2025, but they still have yet to make any serious progress on a new agreement.
The ILA has already shown they are willing to strike to get what they want in their next contract. Negotiations have been contentious to date, and failure to come to an agreement could lead to another strike in early 2025. Factoring in another potential strike and the expected tariff action by Trump, many importers have already moved up shipments to the end of 2024.
Scarbrough is always here to help you through uncertain times like these. If you need assistance with your imports or are curious how these factors may affect your business moving forward, please reach out to us for assistance.
