In the News
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Beth Baltzan, who served as a senior adviser to former U.S. Trade Representative Katherine Tai during the Biden administration, said a higher tariff rate would encourage people making cars in North America to choose more U.S. parts to benefit from the tariff-free U.S.-Mexico-Canada trade agreement. The current rate of 2.5% was so low that producers simply paid it, while the higher 25% tariff on trucks had worked to keep parts sourced in North America, she said. "That tariff wall is actually what drives the sourcing patterns in North America that the pro-American manufacturing crowd wants." If Trump's goal was to have countries lower their tariffs on a reciprocal basis, that assumed the U.S. would export more cars, a questionable assumption given current trade flows and "how lucrative the North American market is," she said.
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The Economist