American Consumers Fear More Inflation (Uncut) 03-02-2025

Trump Tariffs: Mexico Joins US to Wage Trade War on China as American Consumers Fear More Inflation

The Trump administration is preparing to score a win as Mexico is caving in to avoid the 25% tariff that Trump threatened to impose earlier this year. Trump plans to impose tariffs on Mexico and on Canada starting Tuesday. He will also charge additional 10% tariffs on China starting March 4. Previously, he agreed to a 30-day suspension of the Canada and Mexico tariffs that were initially supposed to go into effect back in February.

Now, the new start date has been confirmed as March 4. Bloomberg reported that Mexico is ready to play along and it will go ahead and impose tariffs on China just so that the United States doesn’t impose higher tariffs on Mexico. U.S. Treasury Secretary Scott Besant in an interview said that Mexico’s latest initiative is actually to match Washington’s tariffs on Chinese goods. There are rumors that Canada might do the same just to play along.

Here is a very short clip where Besant explains everything in great detail. Take a look. The tariff negotiation isn’t under the purview of Treasury.

It’s USTR, U.S. Trade Representative and Commerce. So I’m going to leave that question to them. I do think one very interesting proposal that the Mexican government has made is perhaps matching the U.S. on our China tariffs.

I think it would be a nice gesture if the Canadians did it also. So in a way, we could have fortress North America from the flood of Chinese imports that’s coming out of the most unbalanced economy in the history of modern times. So you just heard Besant say that it would be really nice if the Canadians did the same thing and it would help create this fortress North America that would help sort of resist Chinese imports.

The goal here is, of course, for North America to put collective pressure on China, the ultimate adversary of the United States, as a way to escalate the ongoing economic and trade war. Previously, Trump clarified that he is pushing for tariffs as a way to address drug trafficking and immigration. Those were his words.

Those were his reasons. He said that fentanyl drug trafficking will decrease as the result of import taxes, although we know very well that illicit drug trafficking is not being taxed. Nobody’s paying taxes on illegal drug trafficking.

So to that end, on Truth Social, he posted, we cannot allow this scourge to continue to harm the United States and therefore until it stops or is seriously limited. The proposed tariffs scheduled to go into effect on March 4th will indeed go into effect as scheduled. China will likewise be charged an additional 10% tariffs on that date.

Reportedly, both Canada and Mexico committed to cracking down on fentanyl trafficking or face steep tariffs. In late February, as part of that effort, Mexico actually extradited nearly 30 cartel figures to the United States, including key members of the Jalisco New Generation Cartel and the Sinaloa Cartel. Those are the two big ones.

Previously, Trump actually stated that drug cartels are now considered by his administration to be foreign terrorist organizations. This is actually an executive order designating the cartels and other organizations to be foreign terrorist organizations. That’s a big one.

Yes, sir. People have wanted to do this for years. So they are now designated as terrorist organizations, foreign.

And Mexico probably doesn’t want that. But we have to do what’s right. They’re killing our people.

They’re killing 250, 300,000 American people a year. Not 100, like has been reported for 15 years. It’s probably 300,000.

In response to the tariff war, China made it clear that it does consider the recent developments and the United States urging Canada and Mexico to match its tariffs as violations of World Trade Organization rules, which it is a very good point. It is a valid point. It leads to global fragmentation.

This is, of course, nothing to do with economics. It is pure politics. And surely there are other more effective ways to address drug trafficking.

But we’re not exploring those avenues. Now, all three countries, the United States, Canada, and Mexico are China’s top importers. So they’re doing business with China.

They have been doing business with China. As you know, the United States has billions of dollars in trade deficit with China. Yet we’re waging this economic war and we’re only stepping up our efforts.

Increasing tariffs will, without a doubt, cause price increases domestically in these three countries because tariffs are primarily paid by consumers and importing companies. And don’t let that confuse you. Importing companies are not in a business to do charity work.

They’re not going to just hand things over to you. First and foremost, they care about their bottom line. So any increases in costs to ship those goods to you are going to be passed on to you, to the end consumer.

I explained how tariffs work in great detail previously. The latest U.S. consumer expectations, by the way, do show that the majority of Americans expect inflation to worsen already without tariffs. As you can see here, personal consumption fell in January as consumer confidence tinks and spending habits reflect that sentiment.

This graph also shows that consumers started to save more than they spend, which is unusual for the United States. And it also signals that they may be generally pessimistic about the economic outlook. This is likely driven by uncertainty as well as inflation potentially taking up.

By the way, the CPI that was released in February did show that inflation outpaced expectations. Another measurement, the personal consumption expenditures price index, which is what the Federal Reserve likes to look at. It showed that inflation was more or less under control within their expectations, so to speak.

Again, that needs to be taken with a grain of salt. That data is known to be somewhat different from the reality. Let’s put it that way.

Do you support tariffs on Mexico and Canada? Why or why not? Let us know in the comments below. I would love to hear from you. Thanks for watching.

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