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Canada's Justin Trudeau announces retaliatory tariffs following Trump's executive order (www.nbcnews.com)
submitted 2 years ago* by to c/world@lemmy.world
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Summary

Trump signed an executive order imposing 25% tariffs on Canadian and Mexican imports—excluding Canadian energy at 10%—plus additional duties on Chinese products.

In response, Prime Minister Justin Trudeau announced a 25% duty on $155 billion in U.S. goods, beginning with $30 billion in tariffs Tuesday.

Mexican President Claudia Sheinbaum indicated reciprocal tariffs, rejecting claims that Mexico tolerates criminal groups trafficking fentanyl and insisting on respect for sovereignty.

Experts warn these tit-for-tat measures could drive up costs, disrupt supply chains, and mirror the previous U.S.-China trade war, possibly harming security.

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[–] 2 points 2 years ago (1 child)

Explain how demand elasticity affects both countries please. I expect Trump uses these tariffs as a scare tactic for countries who depend greatly on exports to America, but i don't know how elasticity of demand plays in.

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  • [–] 4 points 2 years ago

    Tariffs will drive the prices upward but consumers will still be compelled to make those purchases for a time, which is to say that they will just bite the cost because the alternative is less desirable. This demonstrates a lack of equilibrium between price and demand. In a non-elastic scenario, the rise in price would directly correlate to a decrease in demand.

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