WASHINGTON — President-elect Donald Trump is threatening to put a 25% tax on everything imported from Canada and Mexico as a way to force the countries to crack down on illegal immigration and drugs coming into the United States, and additional tariffs on China.
“We’re subsidizing Canada. We’re subsidizing Mexico. That can’t go on,” Trump said this week.
One expert said the tariffs would impact businesses and consumers in Wisconsin.
“We should understand that Wisconsin, despite being sort of a mid-sized state, actually has fairly substantial imports from China and exports to China,” said Dr. Thomas Kemp, the chair of the University of Wisconsin-Eau Claire’s economics department.
That could include anything from consumer goods to electronic devices to machinery.
“These are where you’re likely to see noticeable price increases due to the tariffs,” he said.
Kemp said Wisconsin also exports a significant amount of soybeans to China, so if China were to place retaliatory tariffs on Wisconsin exports, that could impact a farmer’s bottom line.
“All of the major Wisconsin exporters to China, as well as importers from China, right now are all looking around and trying to figure out where they can readjust, either the supply chains or the consumer markets too, that isn’t affected by these tariffs,” he explained. “So for example, instead of maybe getting supplies from China, maybe now you’re going to get those same supplies from Mexico. If there’s a Mexican tariff as well, maybe now you get it from Vietnam.”
And if there’s no way to get around importing from countries with tariffs, Kemp said rising costs for businesses will have a trickle down effect, hurting your wallet. In a recent interview with NBC’s “Meet the Press,” Trump couldn’t promise that the tariffs won’t raise prices.
“I can’t guarantee tomorrow,” he said.
Kemp said there is a potential upside to tariffs. If prices in the U.S. for imported goods are higher, domestic producers could enter the market and sell their products at a competitive price.
Dale Kooyenga, president of the Metropolitan Milwaukee Association of Commerce, said some members of the association are happy; others, not so much.
“I think the general consensus is, let’s use some leverage,” he said. “Let’s get more fair trade for America. But at the same time, let’s make sure that we’re not going down a path of more and more tariffs across more and more goods.”
For now, Kooyenga says the association is waiting to see how it all unfolds when Trump takes office.