Here’s How Badly Trump’s New Tariffs Threat Would Wreck the Economy

The three countries are America’s biggest trading partners, and many industries rely on exporting goods to them in addition to imports. These include car companies, farmers, and food packagers. In all, Canada, Mexico, and China make up more than a third of all U.S. imports and exports, with millions of jobs depending on them. Last year, the three countries bought over $1 trillion of U.S. exports and the U.S. imported nearly $1.5 trillion of goods and services from them.

These tariffs, added to the costs of goods in the U.S., would cause prices to skyrocket as companies would pass their costs to the consumer. Other countries would likely retaliate with tariffs on American products, hurting industries stateside. By all accounts, his plan would cripple the economy, and it has been criticized by most economists. Companies would be far more likely to take their business elsewhere rather than pay tariffs or shell out the high cost of relocating their operations to U.S. soil.

Plus, the U.S. is currently part of a free-trade agreement with Canada and Mexico that Trump bragged about renegotiating during his first term. Tariffs would be a blatant violation of that agreement and also set off a trade war in North America. For a president who is riding a wave of economic dissatisfaction, however unjustified, into office, this will not bode well.