The President of the United States, Donald Trump, has been stating for weeks now that he plans to implement a huge tariff on the countries that do not accept his demands on several issues.
The first country that got his tariff policy was Colombia, which resulted in Colombia complying with Trump's demands. And now, Canada, Mexico, and China are the next ones.
The biggest question from the retail is, what will happen from this policy?
A Double-Digit Increase in Tariffs
U.S. President Donald Trump said that he will implement the import tariff on Canada, Mexico, and China tomorrow, thus potentially driving the increase in product prices.
As the Secretary of the White House, Karoline Leavitt, confirmed, the Trump tariff that will be executed for these countries will be 25% for Canada and Mexico and 10% for China starting from February 1, 2025.
These import tariff taxes will be applied to the major products imported from these three countries, including automobile parts, agricultural products, cars, and other commodities.
Why Are Tariffs Generally Harmful?
Tariffs are one of the political tools that the government has utilised to protect their domestic product. However, implementing lots of these could also hinder the growth of their economy.
One of the most immediate consequences is the significant rise in commodity prices, affecting both companies and consumers. This price surge can drive inflation higher and make it difficult to control.
Further, with the increase in these commodity prices, we can expect a lot of unrest from the impacted industry, limiting their investment, reducing costs (even for employees), resulting in higher unemployment, and thus reducing the buying power of the people.
On the Market Side
- $BTC itself has not reacted well to this,
- nor has $SPXM,
Causing both to decline after the announcement was confirmed.
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