TThe 20% tariff was typical Trump starting the negotiation with a ridiculous number and going from there. Jake Novak had a great column yesterday about how he may actually be angling for a 2% tariff. Additionally, there would be shadow savings as well given that if there are less people here illegally, there are less people using goods and services provided by the government.
We have nearly a 1T trade deficit with Mexico since the start of NAFTA. It was 60B last year ( our deficit with Canada was 9B). Prior to NAFTA that we had a trade surplus with them. A good deal of that comes from US companies building autos there for resale here. I am of the opinion that we need to do something to keep those companies building here with US union workers, even if it does make the price of a car a little higher or the cost of a bottle of tequila a few cents more. Agriculture represents about 9% of our imports from Mexico. Perhaps it would make sense to exempt food from the tariff the way a lot of states exempt food from sales tax given it is a small amount of the total.
We have nearly a 1T trade deficit with Mexico since the start of NAFTA. It was 60B last year ( our deficit with Canada was 9B). Prior to NAFTA that we had a trade surplus with them. A good deal of that comes from US companies building autos there for resale here. I am of the opinion that we need to do something to keep those companies building here with US union workers, even if it does make the price of a car a little higher or the cost of a bottle of tequila a few cents more. Agriculture represents about 9% of our imports from Mexico. Perhaps it would make sense to exempt food from the tariff the way a lot of states exempt food from sales tax given it is a small amount of the total.
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