Chart Talk: February 5, 2025

Callie Cox, author of the blog OptimistiCallie?wrote a great article?last week on the impact of tariffs on the US Consumer.? As you can see in the chart below from her website, tariffs will hit the US Consumer at the grocery store A LOT.? The United States get roughly 90% of our fresh vegetables from Mexico and Canada. “Canada supplies 66% of our imported poultry and 51% of our imported pork.” she goes on to write.? The tariffs will not just hit groceries either.? Cananda and Mexico supplied 47% of our imported car parts.? The Peterson Institute for Economics estimated that the tariffs proposed over the weekend would cost American households on average $1,200 per year.? In short, tariffs, historically don’t work, as we saw in the Smoot-Hawley Tariff Act of 1930, which raised around 900 import tariffs by an average of 40% to 60% and was one of the leading causes of the Great Depression where we saw imports plummet and a flight of capital.?

Now, as we saw over the weekend, President Trump threatened 25% tariffs on Mexico and Canada and at the last minute delayed the tariff start date by one month with both sides coming to an agreement.? Hopefully President Trump is threatening tariffs to bring back manufacturing jobs to the United States which have been decimated over the past 40 years. As you can see in the chart below provided by the Federal Reserve of St. Louis.

President Trump’s goal is to build up our middle class through domestic manufacturing jobs.? We believe that this part of his plan is altruistic.? We disagree with the way he is going about it by tariffing our closest allies and hopefully President Trump will continue to use rhetoric and not action to persuade foreign governments to invest in the United States.

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