Negotiations between the Oval Office and the leaders of Mexico and Canada have proven to be fruitless, as Trump’s 25% tariff on our northern and southern neighbors will resume at 12:01 a.m. on Tuesday, March 4.
The 10% levy on all imports from China that Trump enacted in February will be doubled as well.
There seemed to be a possible way to avoid the sanctions after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum pledged to stop the spread of fentanyl and illegal immigrants into the US, which prevented the tariffs from being enacted back in February.
After the announcement, the stock market dipped, with the S&P 500 falling 2% Monday afternoon. However, the Trump Administration remains adamant that the tariffs will stabilize the economy, attract foreign investment, and jumpstart American manufacturing.
However, the question still remains: How will Trump’s tariffs affect Pittsburgh?
The brunt of the tariffs will be felt by the consumer. Because of the sheer amount of goods received from China, Mexico, and Canada (the United States’ three largest trading partners), it’s difficult to imagine a world where prices will not rise.
Agricultural goods from Mexico, such as avocados, raspberries, and tomatoes, as well as Chinese imports such as electronics, clothes, and even children’s toys, will face a steeper price to be sold on American shelves. A price that the sellers of the goods, such as Walmart, Target, Best Buy, Amazon, or other nationwide chains will have to pay to sell them.
Lumber will also rise, as 28.1 million cubic centimeters of lumber, or 30% of the amount used in the US in 2024, was imported from Canada and will face the 25% tariff. Home improvement stores such as Home Depot, Lowes, and Menards will face the brunt of that increase.
It’s not a stretch to say that these companies will increase their prices to recoup the lost profit.
Local businesses will also be affected, as Barry Pinter of KDKA News Pittsburgh interviewed a Beaver County plumber and an Allegheny County house remodeling business owner.
The house remodeler, Corey Choate, claimed that the tariffs will help American business but will still be a thorn in his company’s side.
The plumber, Brian Leheny, said that as the cost for his materials rise, he will be forced to pass those prices along to his customers.
This comes as no surprise, as experts estimate that anywhere from 16-30% of Home Depot’s merchandise comes from China and will be subject to levies.
In all, experts at the Peterson Institute for International Economics predict that these tariffs will directly cost the average American household around $1200 dollars annually.
In a more historically Pittsburgh-centric angle, the steel and aluminum industry could be affected positively and negatively by the tariffs.
According to the Council on Foreign Relations, the U.S. relies much more on domestic steel (74% of steel coming from US manufacturers) than aluminum (56% made in the USA), and when Trump placed tariffs on steel and aluminum in 2018, prices rose 2% and imports fell nearly 25%.
The price rise was great for steel companies, but every industry that purchased steel (automotive, construction, packaging, appliances, etc.) had to pay due to the lack of cheaper alternatives.
In other words, the tariffs made foreign-produced steel less appealing and more expensive, so companies were forced to look towards U.S.-produced steel. These American steel companies would in turn raise the price of their product in order to maximize profit.
The companies purchasing the steel would then raise the price of the product that contained it, directly affecting the consumer.
These price rises are expected to become even larger under the 25% tariff on Canada and Mexico and the 20% levy on China.
The 2018 tariffs also directly caused a loss of jobs in the steel and aluminum industries, with 75,000 steel workers losing their jobs in a rapidly automating industry.
Tariffs are a weapon that can be beneficial and can also wreck a country’s economy.
They also don’t have to be permanent. Trump’s tariffs are punitive, with the White House claiming that they are a reaction to the “national security threats” imposed by illegal immigration and fentanyl trade. Trump has also historically been against trade with China, claiming that China is taking advantage of American consumers.
Perceived exploitation by China was also a key reason that the U.S. left the World Health Organization after Trump was sworn into office in January.
As of the evening of March 3, Trump has said that, “Tomorrow… They’re going to have a tariff”.
Canadian Foreign Minister Melanie Joly released a statement Monday afternoon, teasing retaliatory tariffs, stating: “If Trump is imposing tariffs, we are ready. We are ready with $155 billion worth of tariffs and we’re ready with the first tranche of tariffs, which is $30 billion.”
Mexican President Claudia Sheinbaum hopes for diplomacy to end the tariffs, calling for Trump to end them, stating: “…we will make our decisions and there is a plan, there is unity in Mexico.”
It remains to be seen how the tariffs will affect Pittsburghers and Americans as a whole, but we will find out on March 4th when they are implemented.
