The Canadian Minister of Energy and Resources Jonathan Wilkinson on the relationship with the United States and the commercial conversations between Prime Minister Trudeau and President Donald Trump.
President Donald Trump Measures to impose or threaten higher prices to countries like China, Canada and Mexico – the three largest trade partners in America – have aroused questions about prices and how they have an impact on consumers.
Trump signed executive decrees last weekend to impose prices of 25% on imports from Canada and Mexico, with a rate of 10% rate of Canadian energy products. These prices were delayed at least a month after Canada and Mexico announced measures to counter drug smuggling and illegal immigration along their borders with the United States
He also increased rates on goods imported from 10% from China through the plan. These prices entered into force on February 4 and the Chinese government announced reprisals on certain American energy exports and has taken other punitive measures, including an antitrust survey of Google and restrictions on mineral exports of rare earths.
Prices are taxes collected on imported goods and services. Although they historically played a more important role in the contribution to federal tax revenues, developed countries have moved away from the understanding of prices as the main source of financing and moved to other forms of taxes – such as income, payroll or sales taxes.
What’s going on with Trump’s prices on China, Canada and Mexico?
President Donald Trump has raised prices in Canada and Mexico, as well as in Canada, which he cited in response to fentanyl flows in the United States in the United States (Photo of Chip Somodevilla / Getty Images / Getty Images)
After the end of the Second World War, the global trade system went to a format based on rules for prices which were initially established under the general agreement on prices and taxes (GATT) in 1947, which later became part of the World Trade Organization (WTO (WTO) in 1995, the Congressal Research Service said.
The system established by Gatt and the WTO have created rules governing the way countries can use prices on business partners, as well as to settle disputes and prevent trade wars – which occur when countries enter a cycle impose reprisal rates on each other.
He has contributed to a drop in global tariff rates as well as market expansion for American exporters. As the CRS noted, US exports have increased by more than 160% adjusted for inflation from the WTO establishment.
Voters reject Trump’s pricing push; Most believe that politics will harm the economy
A panel that reads “ buying the Canadian instead ” is displayed on the bottles, suspended near another panel that reads “American Whiskey” after the announcement by Trump on Canadian products. (Reuters / Chris Helgren / Reuters)
Who pays for prices?
Companies that import products covered by a price paying the price when these goods enter the country of the importer.
In the United States, prices are collected by the Customs and Border Protection Agency (CBP), which is a undergoes of the Ministry of Homeland Security. Trump proposed to create an “external income service” which would be responsible for collecting prices, although it is not clear if this plan goes ahead.
The prices increase the price of an import company, which must then decide to improve the prices paid by consumers to maintain their beneficiary margins, or to maintain relatively constant prices and absorb the cost of the price in its results.
In some cases, the export company can seek to maintain its market share by reducing its prices to help importers to face the cost of the price – although their desire to do it depends on the demand for the product subject to the rate .
Canada has announced border security measures that prompted Trump to delay its rates on Canadian products for at least a month. (Kamara Morozuk / Bloomberg via Getty Images / Getty Images)
Trump prices cause commercial group warnings
“It really depends on the sensitivity to product prices,” Fox Business Brandon Parsons, economist at La Graziadio Business School at Pepperdine, told Fox Business.
“For a producer who has a lot of leverage – consumers really want to buy their product and there is an inelastic demand, such as the iPhone – they are able to increase the price and consumers will always pay For this, and the iPhone holds its market share, “said Parsons.
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“Other products where consumers are more sensitive to prices and there are many substitutes, there are a lot of competition, so it could be in this case that producers will simply reduce their margins. They will therefore maintain the same prices So that they do not lose market share, losing demand, but eating a little about their margins, so their overall profitability decreases, “he added.
