Tariffs Would Probably Raise Consumer Prices

Increases in tariffs on products imported from Canada, Mexico and China could be inflationary for the American consumer. 

Guillermo Garcia Sanchez, Economist, Texas A&M: “Canada and Mexico are the biggest trading partners with the United States. Together, they represent close to 30 percent of all trade done by the United States. In the case, for example, of Mexico, close to 23 percent of agricultural products imported by the United States come from Mexico. In the case of Canada for example, 50 percent of energy-related products that the United States imports, they come from Canada.

The volume of trade between the United States and its neighbors means small changes in trade policy could have outsized effects on the economies of all three countries. 

Guillermo Garcia Sanchez, Economist, Texas A&M: “So it's really not a Mexican car, it's a car composed by different products that come from Canada, the United States and Mexico, and that get assembled in Mexico and then re-imported into the United States. So we're not talking about products that are either Mexican, American or Canadian. Really, the trade between the three countries is integrated. We have different supply chains that feed each other and make us more competitive against the world.”

The integration of supply chains across borders is often invisible to consumers, who would pay the bulk of the tariffs proposed by the incoming Trump Administration.

Guillermo Garcia Sanchez, Economist, Texas A&M: “So any tariffs that are imposed are going to be passed on in some way or another into the consumers because tariffs ultimately are put on the importer, not on the exporter, so the companies that are going to be affected enormously are the ones who are importing.”

A bill was introduced this week into the Nebraska legislature to ban lab-grown meat from being produced or sold in the state. 

The bill comes five months after Nebraska Governor Jim Pillen, believed to be the largest hog producer in the state, signed an Executive Order prohibiting state agencies from procuring lab-grown or other meat alternatives. 

The Nebraska Department of Agriculture also plans to require distinct labeling of alternate meat products, and require that alternate meat products be sold in areas separate from conventional meat products. 

The Executive Order went into effect in August of 2024. 

Issues of pipelines, carbon sequestration, and farmland ownership have also been introduced in several states for consideration this session.

For Market to Market, I’m Peter Tubbs.