【Boss Economics World】The REAL Cost of Trump's Tariffs on Mexico and Canada

hello viewers you won't believe the chaos that's about to land on your doorstep or should I say on your wallet today in boss economics world we're going to dive headfirst into the whirling tornado of economic mayhem caused by President Donald Trump's so called economic genius a man who seems to believe that throwing a 25 percent tariff on Mexico and Canada is the solution to every problem in America welcome to the latest edition of how to crash an economy in 3 Easy steps buckle up folks because this roller coaster ride into recession territory is going to be a wild one you see Trump's got beef he's angry that Canada and Mexico are letting in billions of illegal immigrants immigrants who steal jobs smuggle drugs and don't contribute to society at least according to the former president now instead of addressing complex cross border migration with nuanced policies or let's say anything resembling diplomacy he's going to barrel straight into a trade war with America's two closest economic partners this reckless lurch towards tariffs isn't just a minor scuffle with your neighborhood grower over a price tag no this is a geopolitical brawl with gigantic consequences let's review Trump's playbook real quick if there's a problem slap a tariff on it Trump's reasoning why should we be enriching other countries while our citizens struggle so far so populist right but here's the rub more tariffs don't mean you magically bring back jobs or convert trade deficits into surpluses overnight in fact let's be clear about one thing tariffs are indirect taxes on consumption their taxes period instead of targeting foreign producers Trump's tariffs are more likely to cause prices to skyrocket for American consumers so who's really footing the Bill here spoiler you by imposing up to 25 percent tariffs on our largest trading partners yes folks we're talking about Mexico and Canada a partnership worth 1.8 trillion dollars with at Trump is willing to upend bank accounts nationwide in the name of border security he wants to salvage some nationalist pipe dream where the US economic machine runs on isolationism but have you ever tried running the most complex economy on earth while hiding behind trade walls let's just say history hasn't exactly been kind to that idea economists from Bloomberg have dropped a bombshell bluntly proclaiming that slapping this tariff hammer on North America is basically the equivalent of shooting yourself in the foot while trying to win a race Nicole Gordon Caratelli and Mava Cousin summit up pretty well the tariffs would cripple US automakers let's break that down in real terms the USMCA governs a giant chunk of the very system that produces assembles and sells cars across all three countries the transport sector is one of the most integrated sectors here so when Trump slams his gavel on new automotive tariffs guess who's paying more for their next car fun fact GM Ford and Stellantis all iconic American companies source as much as 40 percent 30 percent and 25 percent of their cars from Mexico and Canada what happens when you hit those imports with a 25 percent tariff prices balloon Wolf Research ran the numbers and suggest that new car prices could rise by about $3,000 let me toss a few more numbers at you because they say a picture is worth a thousand words but maybe a few good stats are worth much more Stallantis MV makers of Chrysler Jeep Dodge Fiat oh yeah those guys would see imported costs exploding we're talking tens of billions of dollars in auto parts and 4 million finished vehicles slammed with sudden tariffs those tariffs don't just disappear into thin air either no automakers either pass those costs onto you the buyer or worse they scale back production or move jobs overseas to non North American countries that haven't been tariffed by Trump's slap happy trade hand and it's not just cars think about all the other highly integrated industries caught in the crossfire the unwound economic linkages would decimate industries from agriculture to manufacturing who supply chains crisscrossed the three North American neighbors but Trump didn't stop there no he's one upping his previous bombast by suggesting wait for it a universal tariff on all foreign imports I'm not ready for that yet so says Trump but do we dare trust that wonderlust for tariffing the world won't eventually materialize one thing's for sure anyone with even an elementary understanding of international trade can tell you such tariffs are held for global trust market certainty and consumer prices let's also throw something else into the mix here let's talk about the granddaddy of unintended consequences the ripple effect first you've got your trade war tariffs are basically attacks on goods don't listen to anyone who tells you different markets panic with swift ferocity when there's even a hint of tariff heights as we saw from the rapid 1.4 percent drop in both the Canadian dollar and the Mexican peso upon the mere suggestion of tariffs by Trump those investors man they're Wheeling those dollars into anything safe anything solid and that anything is the US dollar which is of course what happens when fear naws at global markets well guess what comes right afterward inflation look it's damn simple when your tariffs force prices to rise on imported goods inflation follows when the inflation thermostat takes upward what do you get an interesting game of wackamole with the Federal Reserve when it comes to interest rates are you waiting for your house mortgage interest rate to drop hoping for a better credit card APR forget about it the more inflation spikes the more the Fed is out of room to lower rates sorry folks but your little dream of more affordable borrowing just went up in flames say hello to a decade of high borrowing costs if Trump's tariff carnage sticks around but that's not even the weirdest part of this whole affair I mean who looks north to one of America's oldest allies Canada and points the finger Trump's really threading the conspiracy needle if he thinks fentanyl is pouring over the Canadian border in droves The US Border Patrol's own numbers shoot holes in that claim showing just 50 pounds of fentanyl seized at the northern border compared to 20 600 pounds at the Mexico border in 2022 let's talk retaliation when your president throwing around 25 percent tariffs like Halloween candy comes with consequences you bet Canada is going to fight back their government has already drawn up 105 billion dollar worth of American made goods to slap with their own retaliatory tariffs the day Trump pulls the trigger things could get a lot uglier before they get better and don't think Mexico's taking this sitting down either they're walking a delicate Titrope hinting they might reduce Chinese imports negotiating their way into Trump's good graces and even carrying out their biggest ever fentanyl seizures on record just to appease him Mexican President Claudia Shine bombs playing limbo with Trump right now trying to avoid plunging Mexico back into another 2008 like economic nightmare that's the crux of it right there this isn't a policy grounded in economic comebacks this isn't smart globalization riding into town this is brinkmanship economics where you create chaos and panic and hope somehow you can manage the aftermath before everything burns down want to know how Mexico assesses the situation they're fretting about the 800 billion dollars in annual trade a number that could plummet if these tariffs see the light of day don't kid yourself the result wouldn't just be inflation on the rise here Mexico could slip back into recession and it could get ugly real fast if these tariffs escalate further we're witnessing an economy dangerously straddling two worlds one where globalization still rules and another where nationalism is trying to catch fire it's important to understand just how deeply integrated America is with Mexico and Canada and how crucial maintaining these relationships are to the very fabric of our economy this isn't the time to slap on trade blinders and sprint backward into isolationism letting relations fray over crude populist ideas of economic nationalization tariffs on our backbone the downfall might hit faster than you think this is boss Economics world signing off with a final dire warning the next chapter of America's economy is shaping up to be one of the ugliest battlefield brawls we've seen between populist politics and economic reality pray your wallet doesn't get caught in the crossfire until next time stay sharp keep informed and guard your savings because hell is coming and it's coming fast