Mexico dominates the American import of heavy trucks, accounting for 82.31% of the total this year. The United States also have its second largest shortage with Mexico.
ustradenumbers.com
Add heavy trucks and medicines to the Long list of import President Trump has focused on rates in his quixotic struggle to free the nation of his annual trade shortage of $ 1 trillion.
Trump announced On Thursday he imposed 100% rates for brand or patented pharmaceutical products – essentially an embargo – and 25% rates for commercial trucks, from 1 October.
Terrible? With medicines, perhaps not, because about 90% of all regulations are in the United States genericAccording to the American Food and Drug Administration. They are not influenced. Moreover, every drug maker that builds a factory in the United States is exempt. It may have to change to toothless.
What about those heavy trucks? Terrible?
Maybe not, since 82.31% of the trucks (HS 8704) have been imported this year, comes from Mexico, mainly through Port Laredo And Eagle passTexas and another 13.40% from Canada. That is 95.71% of the total of $ 24.1 billion, according to data from US Census Bureau until July, the last available.
Mexico and Canada are of course the “M” and the “C” in USMCA, the Convention negotiated in his first term with which the Input could enter the United States without being subjected to rates if they had been met, as the case had been with the successor to the treaty, Nafta.
But maybe. Perhaps it is terrible for manufacturers of commercial vehicles Daimler, Paccar, Volvo and Traton, all with production in Mexico.
That is because earlier this year, when he announced 25% rates involving the import of USMCA Partners Canada and Mexico, Trump followed with a ‘cutting out’, which means that the import that meets the treaty conditions would not be influenced.
In this case the administration is has not yet been clarified Whether they would be exempt. Because Trump has made the announcement on social media and no formal notification has been published in the Federal Register, as usual, the intended trucks can have a more specific six-digit or even 10-digit harmonized system code.
But since his ‘Liberation Day’, Trump has published a number of carve outs, announcing a trade war with the world. He has issued carveouts for smartphones; Oil from Canada, which was affected with 35% rates; And gold from Switzerland, which was hit by 39% rates.
In the midst of the many carve -outs, reversations and repeated breaks since 2 April, a Financial Times -Columnist created the “Taco theory” -Trump always kips.
If Trump takes a separation for these vehicles that come from Mexico and Canada, move the needle from “terrible” to “toothless”, because the pronunciation would make a little more than 4% of all imports of us.
Keep in mind that, although the American import in this category was a total of $ 24.10 billion to July, the export of heavy trucks amounted to a total of $ 10.60 billion, with just under 70% on the way to Canada.
Two last points: Trump explained rates for pharmaceutical products and heavy trucks, as well as certain furniture, kitchen cabinets and bathroom luminaires based on importing national safety. These are called section 232 rates, which first become law in 1962.
To begin with, it seems to fly why people take medicines. It is difficult to see how bathroom luminaires, kitchen cabinets or furniture threaten national safety. Even those large commercial vehicles can only become a threat on American soil, when you place an American behind the wheel, but the national emergency situation?
Second point. The announcement largely focuses on two countries, with which the United States has the largest trade shortages: Mexico and Ireland, both members of what Trump called the “Dirty 15”.
The American shortage with Mexico, which was $ 112.59 billion until July, was second to the shortage with China, which was $ 128.58 billion. The American shortage with China was five times that Mexico when Trump started his trade war with the Asian nation in his first term. Mexico is also the largest trading partner in the United States and the largest import source. It is in second place as a buyer of US exports.
The American shortage with Ireland is now the fourth largest, a total of $ 84.81 billion to July, an increase of 88.99% compared to the same seven months last year, almost four times the increase percentage for the American deficit with the world.
Trump’s announced rates for pharmaceutical products and heavy trucks, which have received the most attention, are probably more toothless than terrible, if trucks are indeed “carved”, while furniture, bathrooms and kitchen cabinets seem particularly strange.
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