Monarch Discusses Trump’s Tariffs on Canada, Mexico and China in Newsweek and WAER Articles
February 4, 2025
Newsweek,WAER
The president announced blanket tariffs on imports from Canada, China and Mexico to go into effect on Feb. 4. Trump cited concerns about trade deficits and stopping the flow of fentanyl into the United States to justify the tariffs, which many economists warn could lead to higher prices for American consumers or cause other economic disruptions.
As part of the tariffs, Trump is ending the “de minimis exception,” which allows companies to avert paying duties on imports worth $800 or less when shipping packages to customers in the U.S. Ending this loophole could have impacts for popular e-commerce cities like Shein and Temu, which have skyrocketed popularity over the past few years for U.S. consumers.
Ryan Monarch, assistant professor of economics, tells Newsweek prices will be driven up not only by the tariffs themselves, but also the increased costs with complying with customs rules.
There will be added costs both from sellers, who will need to prepare paperwork and calculate the value of each package as well as U.S. customs workers who will be tasked with enforcing the new policy, he says.
“Part of the reason the exemption exists in the first place is that it didn't seem worth it to try to do all of the work to examine all of these packages and imported things that are of such low value,” Monarch says. “We should expect that those prices are going to go directly onto American buyers. Research has shown that Chinese suppliers pass on those prices completely.”
In the WAER article, “Local economist warns impending tariffs will create an “inflationary shock” for CNY consumers,” Monarch explains that the difference between the 2019 tariffs and today's is Trump originally targeted tariffs toward specific materials. This time Trump is proposing blanket tariffs.
“You should think of it as raising the price of all of the things that the U.S. imports,” he says. “It doesn't matter where it's coming from. It doesn't matter what the product is.” And when prices spike all at once, he adds, “we should expect to see an inflationary shock.”
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