Mere months into the new presidency, President Donald J Trump has taken actions that have set in motion changes not seen since the dissolution of the Soviet Union on December of 1991. With the introduction of a sweeping tariff plan against the foreign automotive industry based on goals to recenter car manufacturing within the United States once again. This along with targeted tariffs against Mexico, Canada, and China mean once cheap and reliable trade partners will be forced to raise their corresponding tariffs moving the average price of goods up in the United States.
What to expect?
When anything is taxed, prices on the taxed goods usually rise to meet the new normal. In regards to the car industry, it is projected that each new car imported into the United States will have a price increase of $5,000 to $15,000. On a more day-to-day basis, goods like Mexican grown fruit and vegetables (such as avocados) will rise in pricing. Foods that the U.S relies on during the winter months when the growing of such items is difficult. Alongside vital food stuffs, crude oil and fuel costs are also tariffed and will thus rise in cost.
When should change be expected?
The stock market has already began reacting in unpredictable ways but car manufacturers have rolled out increases in pricing as well as much higher interest rates in preparation for a lean spring. It takes time to build the necessary infrastructure required to construct cars and so change will be slow to come to the automotive industry. With the product side of things, prices have also increased for a lot of foreign made goods. Phones and computers have gone up 15 percent and food is also on the rise.
With an unpredictable market and an ever-changing economy, change is going to come quickly and often without warning so the prices of goods and services will fluctuate for the next 5-10 years depending on the levels of tariffs placed on each country and how long they last. This seems to be a trend under the Trump organisation and so only time will tell what the future holds.
