What to know about BRICS nations and why Trump wants to tariff them
The BRICS alliance is a bloc of nine countries that in recent years looked to reduce dependence on the U.S. dollar.
President-elect Donald Trump, who will be sworn in at his inauguration on Jan. 20, has announced plans for tariffs that have drawn the attention of economists and consumers.
Trump has said he would sign executive orders on his first day in office to impose a 25% tariff on all imports from Mexico and Canada.
“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” Trump wrote on social media site Truth Social on Nov. 25.
He will also impose a 10% tariff on Chinese products “above any additional tariffs.”
“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,” Trump wrote on Nov. 25 in a different Truth Social post.
The proposed tariffs, which would deliver on his campaign promises, will slow down illegal immigration and drugs from entering the country, Trump has said.
Trump also hopes that taxes will increase U.S. manufacturing and bring in new companies.
But several experts have said the threat was likely a negotiating tactic intended to prod the countries to take action on drugs and immigration.
Many economists have said the tariffs will cause imported products to become more expensive while others have said they don’t believe a price spike will occur.
Here is what to know about how California could be impacted.
What are tariffs?
Tariffs are taxes imposed by one country on goods imported from another country, according to the nonpartisan tax policy nonprofit Tax Foundation.
Tariffs are trade barriers that raise prices, reduce available quantities of goods and services for U.S. businesses and consumers and create an economic burden on foreign exporters, according to the organization.
In 2018, the Trump administration imposed tariffs on various exports to boost U.S. industries and punish foreign exporters, according to the nonprofit.
But rather than hurting foreign exporters, American firms and consumers were hardest hit by the Trump tariffs, according to the organization.
What products could cost more?
If prices increase, a range of commonly used products could be impacted. Here are a few:
From avocados to tea, imported grocery products could see a price increase. According to the American Feed Industry Association, nearly 78% of vitamin imports come from China,
More than 500 imported clothing items like baby clothing and swimwear could see a price increase, according to a November report from the National Retail Federation.
In the category of footwear, CBS reported that 99% of the products ranging from boots to shoes in the U.S. are imported from other countries, citing the Footwear Distributors and Retailers of America. By volume, 56% of footwear comes from China, according to CBS’ report.
Newsweek reported that several auto manufacturers including General Motors and Stellantis have plants that the Trump administration plans to tariff. The tariffs could drive up the price of cars and “wreak havoc in the auto industry,” Newsweek reported.
Gas prices across the U.S. may rise for some states like Wisconsin because the potential spike would be caused in particular by the 25% tariff on Canada, which relies on Canadian oil.
It won’t affect California, however.
“There will be virtually no impact that we expect in California as California’s refineries do not generally use Canadian crude oil and import oil from the Middle East,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in an email on Thursday.
What companies have spoken out about the potentially higher prices?
Several major retailers have confirmed their prices will likely increase under the proposed Trump tariffs.
As of Dec. 4, the following companies have commented on the tariffs:
Walmart
On Nov. 19, Walmart Chief Financial Officer John David Rainey told CNBC that there “probably will be cases where prices will go up” for the corporation, though he said it’s too soon to say which products could cost more due to the tariffs.
In California, Walmart operates 280 stores statewide.
Ikea
Jesper Brodin, CEO of the company that controls most Ikea stores, told CNN that it will be difficult for the furniture chain to keep prices low with high tariffs.
“In general, we don’t believe tariffs will support international companies and international trade,” he said to CNN. “At the end of the day, that risks ending up on the bills of customers.”
Ikea, which manufactures most of its goods in Europe, operates more than 50 U.S. stores. The chain has nine locations in California, including Burbank, San Diego, San Francisco, and West Sacramento.
Lowe’s
On an earnings call last month, Lowe’s CFO Brandon Sink said about 40% of the company’s costs for producing goods come from outside the U.S., CNBC reported. The figure includes merchandise from national brands and direct imports, according to the report.
Sink reportedly said tariffs “certainly would add product costs” for the home improvement store chain, though “timing and details remain uncertain.” Lowe’s operates 112 stores throughout California, according to its store locator.
Stanley Black & Decker
In an October earnings call, Donald Allen, CEO and president of the tool manufacturer Stanley Black & Decker, said, “And obviously, coming out of the gate, there would be price increases associated with tariffs that we put into the market” if Trump were to impose them.
If tariffs were implemented, Allen said the company also has a longer-term plan to potentially move some of its production out of China — one of the main countries Trump plans to target with his tariffs.
However, while Trump has said increasing domestic manufacturing is a key goal of the tariffs, Allen said the company would likely move production “to other parts of Asia, maybe to Mexico.”
“[It’s] unlikely that we’re moving a lot back to the U.S. because it’s just not cost-effective,” he added. “And there’s questions about whether we even have the labor to actually do that in this country.”
Allen said he doesn’t know what tariff scenario could play out, but his company has a playbook ready.
AutoZone
AutoZone, the largest retailer of auto parts in the U.S., expects to raise its prices if Trump implements the tariffs, CEO Philip Daniele said on a September earnings call, according to Business Insider.
Daniele said prices would gradually settle back down over time but the company will initially “pass those tariff costs back to the consumer,” Business Insider reported.
AutoZone operates more than 670 locations in California, including 38 in Los Angeles and 19 in San Diego.
Columbia Sportswear
Global sportswear brand Columbia Sportswear has spoken out against Trump’s tariffs since 2019. More recently, Timothy Boyl, chief executive, told The Washington Post in October it was going to be “very, very difficult” to keep products affordable for Americans.
“We’re buying stuff today for delivery next fall,” Boyl told the publication. “So we’re just going to deal with it and we’ll just raise the prices.”
The Columbia brand is sold at retailers across California, including Bass Pro Shops and Dick’s Sporting Goods. The company also operates 23 factory stores throughout the state.
When could prices rise?
Some products could see immediate price hikes, while others may be more gradual, according to USA TODAY.
Gas prices for some states could quickly increase as tariffs on Canada would raise the price of Canadian oil. Cars could become more expensive quickly as many American vehicle parts are imported from Mexico.
But some tariffs on other goods like steel and aluminum would take longer. Those items require U.S. Department of Commerce approval and could take up to nine months, according to a Wells Fargo analysis. After that, the president has 90 days to analyze the findings and 15 days to implement a new policy.
Should I buy anything now?
Not necessarily, according to experts who spoke to USA Today.
A bigger purchase, like a car, could be beneficial, but experts say stocking up on perishable foods is unrealistic.
USA TODAY reporters Daniel de Visé and Jonathan Limehouse contributed to this report.
Wes Woods II covers West County for the Ventura County Star. Reach him at wesley.woodsii@vcstar.com, 805-437-0262 or @JournoWes.
