Denver 7: President-elect Trump's tariffs will impact small businesses, Colorado economist predicts

November 30, 2024

DENVER — If enacted, President-elect Donald Trump's proposed tariffs against Canada, Mexico and China will impact small businesses, according to a Colorado economist.

Trump took to social media to announce his plans to place a 25% tariff on all products coming into the U.S. from Mexico and Canada, citing the thousands of people pouring over the border along with drugs like fentanyl.

“This tariff will remain in effect until such time as drugs, in particular fentanyl, and all illegal aliens stop this invasion of our country,” Trump wrote. “Both Mexico and Canada have the absolute right and power to easily solve this long-simmering problem.”

Trump also said he’ll place an additional 10% tariff on China.

“I have had talks with China about the massive amounts of drugs, in particular fentanyl, being sent into the United States – but to no avail,” Trump wrote. “Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our country, mostly through Mexico, at levels never seen before.”

“About 46% of our total imports come from these three countries, and that's why putting tariffs on these three major exporters to us is going to have multifold effects for us,” explained Dr. Kishore Kulkarni, a distinguished professor of economics at the Metropolitan State University of Denver.

Raw material prices could impact production, and small businesses may be forced to pass along that cost to the customer.

“If he really goes through his promise of putting 25% tariff, that will, in fact, increase the prices in the US," Kulkarni said.