President Trump was recently successful in persuading Colombia to accept deportees by threatening a 25% tariff. Trump is now ready to use the same strategy against Canada and Mexico, possibly as soon as Saturday.

This time the stakes are higher, it’s a much larger risk compared to Trump’s move against Colombia, which accounts for roughly 0.5% of U.S. imports. In contrast, almost 30% of all U.S. imports come from Canada and Mexico. These much higher percentages greatly increase the chances that Trump could undermine his campaign promises to get prices and inflation under control.

Trump has made lowering gasoline prices at the pump one of his main strategies for handling inflation, but tariffs on Canada could drive up the prices. Those that oppose Trump’s proposed tariffs warn that his play against Canada and Mexico could increase inflation by as much as 0.5 percentage points, and damage GDP growth.

Trump isn’t backing down though, the Trump White House says it’s looking at the big picture. Trump’s director of the White House National Economic Council, says that the people who are causing panic over Trump’s trade policy aren’t giving attention to Trump’s other policies that go along with the tariffs, like drilling, tax cuts and reduced spending.

Tariffs are also a great tool to help reduce illegal immigration, which will ultimately help to reduce spending and strengthen the economy!

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