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Companies Scrambling To Respond To Trump’s ‘Beautiful’ Tariff Hikes

Published

5 months ago

11 minute read

From the Daily Caller News Foundation 

By Adam Pack

Companies are scrambling to respond to President-elect Donald Trump’s “beautiful” tariff proposals that his administration may seek to enact early in his second term.

Proactive steps that companies are taking to evade anticipated price increases include stockpiling inventory in U.S. warehouses and weighing whether they need to completely eliminate China from their supply chains and raise the price of imported goods affected by tariff hikes, whose costs will be passed onto consumers.

Free-trade skeptics are touting companies’ anticipatory actions as delivering a clear sign that Trump’s proposed tariff hikes are already achieving their intended effect of pressuring retailers to eliminate China from their supply chains. However, some policy experts are warning that higher tariffs will be a regressive tax for America’s lower and middle-income families and make inflation worse, according to retailers and economists who spoke to the Daily Caller News Foundation.

On the campaign trail, Trump proposed a universal tariff of up to 20% on all imports coming into the U.S. and a 60% or higher tariff on all imports from China. Trump is considering Robert Lighthizer, the former U.S. trade representative during his administration’s first term who is well-known for favoring high tariffs, to serve as his second administration’s trade czar, the Wall Street Journal first reported.

‘Mitigation Strategies To Lessen The Impact’

Companies are taking preemptive measures, such as stockpiling goods in U.S. warehouses, to work proactively against anticipated price increases that higher tariffs would inflict, Jonathan Gold, vice president of supply chains and customs policy for the National Retail Federation, told the DCNF during an interview.

“They’re looking at different mitigation strategies to lessen the impact that they might feel from the tariffs,” Gold told the DCNF. “One of those strategies is to start looking at potentially bringing in cargo, bringing products earlier to get ahead of potential tariffs that Trump might put in place.”

Importing goods into the U.S. ahead of schedule leads to additional costs for retailers that will likely be passed onto consumers, but waiting to import goods from China after a 60% or higher tariff on Chinese imports goes into effect would be substantially more expensive, according to Gold.

A recent NRF study projected that Trump’s proposed tariff hikes on consumer products would cost American consumers an additional $46 billion to $78 billion a year.

“A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter,” Gold said in a press release accompanying the study. “This tax ultimately comes out of consumers’ pockets through higher prices.”

Decoupling From China

Part of the rationale behind Trump’s tariff proposals is to force manufacturing jobs to return to the United States and pressure companies to completely eliminate China from their supply chains, according to Mark DiPlacido, policy advisor at American Compass.

“I hope in addition to stockpiling, they’re also looking at actually moving their supply chains out of China and ideally back to the United States,” DiPlacido told the DCNF.

“For a long time, the framing has been what is best for just increasing trade flows, regardless of the direction those flows are going. What that’s resulted in for the last 25 years is a flow of manufacturing, a flow of factories and a flow of jobs, especially solid middle class jobs out of the United States and across the world,” DiPlacido added.

But completely shifting production outside of China is not feasible for some retailers even if companies have taken further steps to diversify their supply chain for the past decade, according to Gold.

“It takes a while to make those shifts and not everyone is able to do that, Gold acknowledged. “Nobody has the [production] capacity that China does. Trying to find that within multiple countries is a challenge. And it’s not just the capacity, but the skilled workforce as well.”

In addition, companies who move production out of China to avoid a 60% tariff on imported goods from the nation could still get hit by a 20% across the board tariff if they move their supply chain to countries other than the United States, Gold and several economists told the DCNF.

“They’re talking about tariffs on imports for which there’s not a domestic producer to switch to,” Clark Packard, a research fellow on trade policy at the CATO institute, told the DCNF in an interview. “For example, we don’t make coffee in the United States, so why are we going to impose a tariff on coffee?”

“Who are we trying to protect?” he added.

Some economists are also pessimistic that the president-elect’s planned tariff hikes will ultimately bring jobs that moved overseas to cheaper labor markets back to the United States.

“What we actually saw from the 2018-2019 trade war was a decrease in manufacturing output and employment because of the tariffs,” Erica York, senior economist and research director of the Tax Foundation’s Center for Federal Tax Policy, told the DCNF in an interview. “It played out just like every economist predicted: higher costs for U.S. consumers, reduced output, reduced incomes for American workers, foreign retaliation that’s harmful.”

The president-elect’s proposed tariff hikes could also eliminate more jobs than those saved or created as a result of protecting domestic industries, such as the U.S. steel or solar manufacturing industries, that may benefit from higher tariffs on foreign competitors, Packard told the DCNF.

“It’s disproportionate — the cost that is passed onto the broader economy to protect a very small slice of U.S. employment,” Packard said. Trump’s 25% tariff on imported steel enacted during his first administration slightly increased employment in the U.S. steel industry, but each job that was maintained or created came at a cost of roughly $650,000 that likely killed jobs in other sectors forced to buy more expensive steel, according to Packard.

‘Bipartisan Recognition’

Despite tariffs’ potential to force companies to raise the price of goods they import into the United States, DiPlacido defended Trump’s proposed tariff hikes as essential to eliminating U.S. dependence on China for a variety of strategic goods and consumer products.

“We need to be able to manufacture a broad range of goods in the United States. And we need the job security and the economic security that a strong manufacturing industrial base provides,” DiPlacido said. “That’s going to be important to any future conflict or emergency that the United States may have with China or with anyone else.”

DiPlacido, citing Trump’s dominant electoral performance, also believes Trump has the “mandate” to carry out the tariff proposals he floated during the campaign.

“There’s a sort of a bipartisan recognition of the problem. Even the Biden administration kept almost all of Trump’s tariffs in place,” DiPlacido told the DCNF. “I think he has the political mandate, and that’s often a harder thing to get.”

However, some economists are questioning whether the thousands of dollars of projected costs that American families would be forced to pay as a result of these tariff hikes could create political backlash that has so far failed to materialize against Trump and Biden’s relatively similar trade policies.

“Voters were rightly pretty upset about price increases and inflation,” Packard told the DCNF. “We’re talking about utilizing a tool in tariffs that will increase relative prices.”

“Tariffs as a whole are a regressive tax,” Gold told the DCNF. “They certainly hit low and middle income consumers the hardest.”

Retailers are forecasting a decrease in demand for consumer products as a result of Trump’s tariff proposals, according to Gold.

The incoming Senate Republican leader has also notably criticized Trump’s proposed tariff hikes.

“I get concerned when I hear we just want to uniformly impose a 10% or 20% tariff on everything that comes into the United States,” Republican South Dakota Sen. John Thune, Senate GOP leader, said in August during a panel on agriculture policy in his home state. “Generally, that’s a recipe for increased inflation.”

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Business

Saskatchewan becomes first Canadian province to fully eliminate carbon tax

Published on April 1, 2025

By

From LifeSiteNews

By Clare Marie Merkowsky

Saskatchewan has become the first Canadian province to free itself entirely of the carbon tax.

On March 27, Saskatchewan Premier Scott Moe announced the removal of the provincial industrial carbon tax beginning April 1, boosting the province’s industry and making Saskatchewan the first carbon tax free province.

“The immediate effect is the removal of the carbon tax on your Sask Power bills, saving Saskatchewan families and small businesses hundreds of dollars a year. And in the longer term, it will reduce the cost of other consumer products that have the industrial carbon tax built right into their price,” said Moe.

Under Moe’s direction, Saskatchewan has dropped the industrial carbon tax which he says will allow Saskatchewan to thrive under a “tariff environment.”

“I would hope that all of the parties running in the federal election would agree with those objectives and allow the provinces to regulate in this area without imposing the federal backstop,” he continued.

The removal of the tax is estimated to save Saskatchewan residents up to 18 cents a liter in gas prices.

The removal of the tax will take place on April 1, the same day the consumer carbon tax will reduce to 0 percent under Prime Minister Mark Carney’s direction. Notably, Carney did not scrap the carbon tax legislation: he just reduced its current rate to zero. This means it could come back at any time.

Furthermore, while Carney has dropped the consumer carbon tax, he has previously revealed that he wishes to implement a corporation carbon tax, the effects of which many argued would trickle down to all Canadians.

The Saskatchewan Association of Rural Municipalities (SARM) celebrated Moe’s move, noting that the carbon tax was especially difficult on farmers.

“It puts our farming community and our business people in rural municipalities at a competitive disadvantage, having to pay this and compete on the world stage,” he continued.

“We’ve got a carbon tax on power — and that’s going to be gone now — and propane and natural gas and we use them more and more every year, with grain drying and different things in our farming operations,” he explained.

“I know most producers that have grain drying systems have three-phase power. If they haven’t got natural gas, they have propane to fire those dryers. And that cost goes on and on at a high level, and it’s made us more noncompetitive on a world stage,” Huber decalred.

The carbon tax is wildly unpopular and blamed for the rising cost of living throughout Canada. Currently, Canadians living in provinces under the federal carbon pricing scheme pay $80 per tonne.

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Automotive

Electric cars just another poor climate policy

Published on April 1, 2025

By

From the Fraser Institute

By Bjørn Lomborg

The electric car is widely seen as a symbol of a simple, clean solution to climate change. In reality, it’s inefficient, reliant on massive subsidies, and leaves behind a trail of pollution and death that is seldom acknowledged.

We are constantly reminded by climate activists and politicians that electric cars are cleaner, cheaper, and better. Canada and many other countries have promised to prohibit the sale of new gas and diesel cars within a decade. But if electric cars are really so good, why would we need to ban the alternatives?

And why has Canada needed to subsidize each electric car with a minimum $5,000 from the federal government and more from provincial governments to get them bought? Many people are not sold on the idea of an electric car because they worry about having to plan out where and when to recharge. They don’t want to wait for an uncomfortable amount of time while recharging; they don’t want to pay significantly more for the electric car and then see its used-car value decline much faster. For people not privileged to own their own house, recharging is a real challenge. Surveys show that only 15 per cent of Canadians and 11 per cent of Americans want to buy an electric car.

The main environmental selling point of an electric car is that it doesn’t pollute. It is true that its engine doesn’t produce any CO₂ while driving, but it still emits carbon in other ways. Manufacturing the car generates emissions—especially producing the battery which requires a large amount of energy, mostly achieved with coal in China. So even when an electric car is being recharged with clean power in BC, over its lifetime it will emit about one-third of an equivalent gasoline car. When recharged in Alberta, it will emit almost three-quarters.

In some parts of the world, like India, so much of the power comes from coal that electric cars end up emitting more CO₂ than gasoline cars. Across the world, on average, the International Energy Agency estimates that an electric car using the global average mix of power sources over its lifetime will emit nearly half as much CO₂ as a gasoline-driven car, saving about 22 tonnes of CO₂.

But using an electric car to cut emissions is incredibly ineffective. On America’s longest-established carbon trading system, you could buy 22 tonnes of carbon emission cuts for about $660 (US$460). Yet, Ottawa is subsidizing every electric car to the tune of $5,000 or nearly ten times as much, which increases even more if provincial subsidies are included. And since about half of those electrical vehicles would have been bought anyway, it is likely that Canada has spent nearly twenty-times too much cutting CO₂ with electric cars than it could have. To put it differently, Canada could have cut twenty-times more CO₂ for the same amount of money.

Moreover, all these estimates assume that electric cars are driven as far as gasoline cars. They are not. In the US, nine-in-ten households with an electric car actually have one, two or more non-electric cars, with most including an SUV, truck or minivan. Moreover, the electric car is usually driven less than half as much as the other vehicles, which means the CO₂ emission reduction is much smaller. Subsidized electric cars are typically a ‘second’ car for rich people to show off their environmental credentials.

Electric cars are also 320–440 kilograms heavier than equivalent gasoline cars because of their enormous batteries. This means they will wear down roads faster, and cost societies more. They will also cause more air pollution by shredding more particulates from tire and road wear along with their brakes. Now, gasoline cars also pollute through combustion, but electric cars in total pollute more, both from tire and road wear and from forcing more power stations online, often the most polluting ones. The latest meta-study shows that overall electric cars are worse on particulate air pollution. Another study found that in two-thirds of US states, electric cars cause more of the most dangerous particulate air pollution than gasoline-powered cars.

These heavy electric cars are also more dangerous when involved in accidents, because heavy cars more often kill the other party. A study in Nature shows that in total, heavier electric cars will cause so many more deaths that the toll could outweigh the total climate benefits from reduced CO₂ emissions.

Many pundits suggest electric car sales will dominate gasoline cars within a few decades, but the reality is starkly different. A 2023-estimate from the Biden Administration shows that even in 2050, more than two-thirds of all cars globally will still be powered by gas or diesel.

Source: US Energy Information Administration, reference scenario, October 2023
Fossil fuel cars, vast majority is gasoline, also some diesel, all light duty vehicles, the remaining % is mostly LPG.

Electric vehicles will only take over when innovation has made them better and cheaper for real. For now, electric cars run not mostly on electricity but on bad policy and subsidies, costing hundreds of billions of dollars, blocking consumers from choosing the cars they want, and achieving virtually nothing for climate change.

Bjørn Lomborg

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