US Tariff Hikes: Impact on Businesses and the Economy

Recently, the United States has increased tariffs on imports from other countries. Former President Donald Trump signed an executive order imposing a 25% tariff on all Mexican imports starting February 4. In response, Mexico agreed to deploy an additional 10,000 troops at the border to curb illegal immigration to the U.S. However, amidst ongoing negotiations, reports indicate that the U.S. has pressured Mexico to impose its own tariffs on Chinese goods. On February 20, U.S. officials met with Mexican authorities in Washington, D.C., conveying that Mexico must implement tariffs on Chinese imports to avoid the 25% tariff hike on its own goods.

Impact on the Auto Industry

Among the hardest-hit industries, Germany’s automotive sector has suffered significant losses. As home to world-renowned car manufacturers such as Mercedes-Benz, BMW, and Volkswagen, Germany now faces serious challenges in maintaining its market share. Experts predict that Trump’s tariffs on the auto sector will have a negative impact. Many companies are already operating on thin profit margins, and absorbing the tariff costs or passing them on to consumers presents a considerable burden. If this situation persists, it will become increasingly difficult to forecast business conditions in the coming quarters, making it even more complex for corporate leaders to navigate the future.

Public Reactions

Jung, a South Korean man in his 20s: “Lately, a single comment from Trump can shake the Nasdaq and the cryptocurrency market. He seems to be accumulating assets to compete with China’s dominance in crypto. When he tweeted that he was ‘paying attention to ADA, Solana, and Ripple,’ ADA surged by up to 50%, while Solana and Ripple jumped by around 30%. Even if Samsung builds factories in the U.S., I don’t see it as a guaranteed benefit. As a Samsung shareholder, I remain uneasy.”

Kim, a South Korean woman in her 20s: “Take Samsung as an example. From an outsider’s perspective, setting up a factory in the U.S. may seem like a way to ease tariff burdens, but that doesn’t necessarily mean it will work in Samsung’s favor. Trump’s goal in raising tariffs is to strengthen American manufacturing. While products made in the U.S. would face fewer tariff concerns, the cost of manufacturing there could be significantly higher than in Korea or other countries. Labor costs and overall operational expenses are major factors to consider.”

Don’t just focus on the trees—look at the whole forest. While higher tariffs may boost the U.S. economy in the short term, they place an increasing burden on other countries. The decision is nearly finalized, leaving little room for immediate action, but one can only hope that trade policies will eventually return to a more balanced state.

US ASIA JOURNAL K-UNIV REPORTER

LIYEON KIM