Think Tank: Trump Tariffs on Neighbors Likely to Be Suspended
President-elect Donald Trump is most likely to announce 25% tariffs on Canadian and Mexican goods the day he takes office, "then immediately suspend them -- with a deadline -- to allow for a negotiation," Bill Reinsch, a think tank leader who often opines on trade, wrote this week.
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Reinsch, who works for the Center for Strategic and International Studies and was a longtime president of the National Foreign Trade Council, said Trump's declaration that he would impose tariffs to stop migration and fentanyl smuggling was the type of thing that often happened in his first term. Reinsch said it was a pattern to "make a headline-grabbing outrageous demand, creating panic in the business community and a short-lived media frenzy which then dissipates -- until the next time."
"At this point, it is too soon to say whether it will work," he said of the negotiation. He said it's possible, if Mexico pushes back, that he might make a deal with Canada and impose tariffs on Mexican goods.
Reinsch said if the tariffs are levied, the administration would be sued, "but litigation would take several years to work its way through the legal system, and it is unlikely the plaintiffs could find a judge that would grant an injunction preventing the tariffs from going into effect."
Reinsch said the tariffs would be a disaster for the economy, especially hurt the auto industry, and drive up the cost of imported oil and gas. (Canada is a major source of oil for the Midwest).
"The threat alone roils markets, creates panic buying, and forces companies to look for alternative sources," he wrote.