Trump’s tariffs on Mexico, Canada and China raise inflation fears

President-elect Donald Trump’s plan to impose 25% tariffs on imports from Mexico and Canada, and 10% tariffs on goods from China, has sparked fears of inflation and potential trade wars.

Economist Jim Rounds, President of Rounds Consulting Group, explained how these tariffs will likely result in higher costs for consumers, especially in Arizona, as these additional expenses are passed on to local residents.

While tariffs are often seen as taxes on importing companies, the real burden falls on U.S. consumers and small businesses, Lyles explained, who will feel the impact of higher prices on everyday goods.

“It’s really a tax on…residents of the U.S.,” Rounds explained, “it’s a tax on typically lower income individuals, and small businesses as well…It doesn’t match that overall goal of let’s expand economic activity.”

Rounds believes the best well to deal with border security is to expand economic development on both sides of the border.

“We don’t have to focus on fixing Mexico’s economy, it’s mutually beneficial,” Rounds said. “…there are so many opportunities that aren’t being taken advantaged of, which is a little disappointing.”

Some of these opportunities Rounds suggested includes: improvements at the ports of entry; potential deep water port in the coast of Mexico; economic development on both sides of the border; expand high tech businesses further.

“I think we are gonna see lower income people and the small businesses hurt, rural Arizona could be disproportionately impacted in some cases,” Rounds said when asked how these tariffs will impact on the Mexico side.

Rounds discussed how vital Canada’s exports are to the U.S. as they import oil, plastics and lumber.

“We’re hurting ourselves, and we are not leveraging it properly,” Rounds said. “There’s different things we could’ve done.”