I am pretty curious about what will happen - there is
vast distrust toward the US as a partner in, well, pretty much anything now. The US may feel that it is super important, but the population is pretty small really - ~340Million - on the global scale that constitutes about 4.22% of the total world population.
And while the buying power of the US is fairly high somewhere between 15% and 26% depending on the way that it is calculated, it also
imports a lot more 'stuff' than it exports.
The biggest exporters to the US ?
- Mexico: Accounted for 15.2% of total U.S. imports, approximately $509.98 billion.
- China: Represented 13.4% of imports, totalling around $448.74 billion.
- Canada: Contributed 12.6% of imports, about $421.86 billion.
While on the surface you might think that these three might cave ?
Well I disagree....
China are probably the least effected by this - out of this top three - at worst it will just increase the cost of technology in the US and have an impact on supply chains - but really China has a huge market outside of the US and as such it will hurt American consumers way more than Chinese manufacturing, they are super effective at pivoting and will do so quickly and effortlessly once more. Imagine the US without access to the latest tech, of the latest chips or the latest Temu crap - My bet is that the US will cave long before China will give a crap.
Canada looks really interesting too - much of their exports to the US are automotive and agricultural. Given the US's appetite for cars and need for food and their inability to to spin up local replacements in a reasonable timescale, I cannot see this harming Canada anywhere near as much as the US - higher grocery prices, higher car prices etc. They are already redirecting to other trading partners and use their "world’s politest" card to garner sympathy on the global stage to great effect. In related news, Maple syrup appeared on the shelf of my local corner shop recently. The US needs Canada way more than Canada needs the US. Being a part of the 'Trump fucked us over' club will really help them find new markets fast.
Mexico looks
slightly more vulnerable to the tariffs to me, but again it's mostly automotive, so cars/trucks rise in price, there will be a short-term reduction in purchases, until wages grow to absorb the tariffs, then off we go again - there is literally no way that the US can brung up car / truck plants almost instantly, so prices and wages shoot up. A move which will utterly slaughter the US's economy. Meanwhile, Mexico has quietly been improving trade ties with the EU and Latin America. If U.S. demand dips, they won’t collapse, they will pivot a little to cover.
Really, the biggest (perhaps only) losers are the US - prices will rise and wages will need to rise to match, inflation may not get to hyper levels, but it will be considerable. Which will then make US goods and services even less competitive on the world stage, which will decimate exports.
Which feels like a bad thing - except for the rest of the world.
What we’re witnessing is a kind of
economic isolation cosplay - the idea that a modern, globally entwined nation can slap on tariffs and “win” is pure fantasy. In our hyperconnected world, you don’t win trade wars, it is just an exercise in self harm really.
I cannot see anyone
meaningfully cave on this - I am sure that there will be trade negotiations and little bits and pieces of fealty paid, but the overall effect will be to absolutely trash the US economy long before anyone needs to actually fully cave in.
