Joshua P. Meltzer, a Senior Fellow at the Brookings Institution, has expressed concerns regarding President-elect Donald Trump's proposed tariffs against Mexico and China. Meltzer said that these tariffs may be "economically and politically unsustainable." He made this assertion in a commentary published by Brookings on December 3.
"President-elect Trump recently announced that when he begins his term on January 20, 2025 he will implement 25% tariffs on all imports from Mexico and Canada," said P. Meltzer. "Whether these proposed tariffs will address U.S. concerns around fentanyl and illegal immigration remains to be seen, but the costs of these tariffs for U.S. industry may be high enough that they will become economically and politically unsustainable."
According to Meltzer's commentary, Trump recently announced plans to impose a 25% tariff on all imports from Mexico and Canada, and a 10% tariff on imports from China when he begins his second term on January 20, 2025. These measures are contingent upon the countries' efforts to control illegal drug trafficking and undocumented immigration.
Meltzer argues that Trump's proposed tariffs are "likely inconsistent with the USMCA," referring to the United States-Mexico-Canada Agreement, which was negotiated during Trump's first term. He suggests that threatening to violate this agreement through tariffs sends a global signal that governments cannot rely on agreements with Trump.
According to Meltzer, approximately 50% of U.S. trade with Mexico and Canada is driven by supply chain sectors such as automobiles, medical equipment, energy, and agricultural products. A 25% tariff would "add up quickly and raise prices," potentially rendering many of these supply chains economically unviable. Mexico and China are noted as the U.S.'s first and third largest sources of imports.
The Tax Foundation adds that increasing tariffs on foreign goods will incentivize consumers to "switch to domestically produced goods," benefiting domestic producers but also raising prices for consumers due to the "redistributive" effect of tariffs.
Meltzer is a senior fellow in the Global Economy and Development program at the Brookings Institution. His research areas include business and workforce issues, climate change, development financing, and global trade. According to his biography on the Brookings website, he has testified before Congress, the U.S. International Trade Commission, and European Parliament, and previously served as a diplomat at the Australian Embassy in Washington D.C.
