MINNEAPOLIS — From foods to clothing, appliances, electronics, vehicles and so much more, the United States is the largest importer of goods in the world, according to the Office of United States Trade Representative.
On Monday, President-elect Donald Trump announced on social media his plan to impose 25% tariffs on all goods from Mexico and Canada, and an additional 10% on all imports from China, if those countries do not take measures to mitigate illegal immigration and drug trafficking into the United States.
"It's not the foreign producer who pays this tax, but instead it's the domestic company that's actually importing the good," explained University of St. Thomas Associate Professor in Economics Tyler Schipper.
He said the proposed tariffs—essentially taxes on goods coming in from other countries—would drive up prices for consumers if implemented.
"I would hope that whenever somebody hears the word 'tariffs,' they hear 'consumer tax,'" Schipper said. "Higher prices at the border means higher prices for imported goods."
Schipper added that consumers won't see the impacts immediately, as companies will stockpile their products ahead of the tariffs being implemented.
"It's kind of further down the line," he explained. "The three months, six months, years down the line, when you start to see more of these price increases once those stockpiles start to run out and importers start having to actually face those tariffs."
The 25% tariff proposed by Trump would be a dramatic shift from the current average 2% tariff on most goods imported into the U.S., Schipper said. He added there could be some truth to the theory that Trump is using the proposed tariffs as a negotiation tactic before coming into office, but it's difficult to know.
"If this is a negotiating position, what you'll likely see is one or both of Mexico and Canada may end up being exempt from these tariffs—if one of them does more to limit illegal immigration or limit drugs coming over the border as was suggested in the Truth Social post."
Schipper added that it's not only imports that would be impacted. According to the Minnesota Department of Agriculture, Minnesota is the fourth largest agricultural exporting state, with commodities such as soybeans and corn bringing in roughly $9 billion per year.
Gov. Tim Walz addressed the proposed tariffs at an event Tuesday morning.
"If trade goes in a bad way and we end up in a trade war with our biggest trading partners, agriculture pays the heaviest price; states like Minnesota pay the heaviest price for that," he said.
Leaders in China and Mexico have pushed back against Trump's accusations. The Chinese Embassy in Washington cautioned on Monday that there would be losers on all sides if a trade war commences.
In a trade war, Schipper said, no one wins.
"That's what we saw in 2018. There were large agricultural tariffs imposed against the United States, and farmers across the country often had trade relationships broken that they built up over long periods of time because their exports were no longer competitive globally."