Trump’s Planned Tariff Hikes #

President-elect Donald Trump announced plans to significantly increase tariffs on imports from Mexico, Canada, and China starting the first day of his second term. Previously, he vowed new tariffs on all imports, aiming to transform the U.S.’s trading relationships, particularly affecting Asian economies.

The proposed tariffs could harm Asian countries reliant on U.S. markets. In 2023, Japan exported $145 billion to the U.S., and South Korea’s U.S. exports totaled $116 billion. These tariffs on Chinese goods may also benefit Southeast Asian regions as production shifts away from China. Shoe retailer Steve Madden plans to reduce Chinese output, sourcing instead from Cambodia, Vietnam, Mexico, and Brazil.

In 2023, the U.S. was the largest recipient of exports from China, Vietnam, Thailand, India, and Japan; second for South Korea and Indonesia; and third for Malaysia and Singapore. The U.S. imported the most from Mexico, followed by China and Canada. Six of the top ten import sources for the U.S. are in Asia. However, there exists a trade deficit, with the U.S. importing more than exporting to these countries. In early 2024, the largest deficit was with China, followed by Mexico and Vietnam, as the U.S. recorded a $90.6 billion deficit with Vietnam. Japan and South Korea are also significant contributors to this deficit.

Trump aims to lessen the deficit by increasing tariffs, though it effectively functions as a tax on Americans, raising prices as companies transfer costs to consumers. As noted by industry insiders, “If we get tariffs, we will pass those tariff costs back to the consumer.”