this post was submitted on 02 Feb 2025
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Summary

Trump signed an executive order imposing 25% tariffs on Canadian and Mexican imports—excluding Canadian energy at 10%—plus additional duties on Chinese products.

In response, Prime Minister Justin Trudeau announced a 25% duty on $155 billion in U.S. goods, beginning with $30 billion in tariffs Tuesday.

Mexican President Claudia Sheinbaum indicated reciprocal tariffs, rejecting claims that Mexico tolerates criminal groups trafficking fentanyl and insisting on respect for sovereignty.

Experts warn these tit-for-tat measures could drive up costs, disrupt supply chains, and mirror the previous U.S.-China trade war, possibly harming security.

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[–] nogooduser 7 points 6 hours ago (10 children)

As tariffs hurt the importing country, not the exporting country I think that it’s odd that Canada would punish their own citizens in retaliation.

They should have added a 25% export tax on energy seeing as Trump clearly didn’t want to pay more for his imported energy.

[–] [email protected] 15 points 6 hours ago (7 children)

As tariffs hurt the importing country, not the exporting country

They very obviously hurt both so long as there's any demand elasticity and especially when there are alternatives sources for the products .

[–] GrammarPolice 1 points 5 hours ago (1 children)

Explain how demand elasticity affects both countries please. I expect Trump uses these tariffs as a scare tactic for countries who depend greatly on exports to America, but i don't know how elasticity of demand plays in.

[–] [email protected] 2 points 4 hours ago

Tariffs will drive the prices upward but consumers will still be compelled to make those purchases for a time, which is to say that they will just bite the cost because the alternative is less desirable. This demonstrates a lack of equilibrium between price and demand. In a non-elastic scenario, the rise in price would directly correlate to a decrease in demand.

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