History of tariffs as impact of current proposals paused with Canada, Mexico
With a lot of talk about tariffs, and the many unknowns that have come along with it, one thing is certain: tariffs are not new for the United States.
“Tariffs have a long history, and they were very foundational in terms of how the U.S. used to protect infant industries,” Tyler Schipper, associate professor of economics and data analytics at the University of St. Thomas, said.
While once a main revenue source for the U.S., that changed when the federal income tax was created.
Schipper adds gauging the impact of tariffs doesn’t always involve an easy equation.
“A very tricky equation, particularly because the economies of Mexico and Canada and the United States have become so integrated,” Schipper said.
“The problem is, is that the gains from tariffs are really diffuse,” Schipper added about the positive impacts being spread out.
On Monday, hours before 25% tariffs were set to kick in for most goods coming in from Mexico and Canada, the nations reached an agreement with the U.S. — a key part including sending troops to the borders in an effort to slow down fentanyl and illegal immigration.
The president of Mexico also reported the U.S. had agreed to work to prevent high powered firearms from entering Mexico, from the U.S..
Those negotiations are giving hope to other economic experts as they reflect on the possible impact of the current tariffs on the table.
“In terms of being willing to negotiate, willing to engage in a lot of rhetoric, that ends up causing some changes that avoid trade wars, I [think] I’m optimistic,” King Banaian, economics professor and director of the Center for Policy Research & Economic Engagement at St. Cloud State University, said.
“Tariffs have led frequently to negotiations that have caused some actions,” Banaian added about the history of tariffs. Adding though, “I think most economists would agree with me that they’ve done more bad [sic] than.”
While the tariffs on our two border countries are on pause for at least a month, a 10% tariff on all Chinese goods will be set in at midnight on Tuesday.