A 25% tariff on Canada and Mexico—what happens next?

Trump’s trade strategy operates like a flywheel, reinforcing itself with every turn.

Higher tariffs raise costs for imports. U.S. companies look for domestic alternatives. More domestic production boosts jobs and investment. A stronger economy fuels national demand.

As businesses adapt, reliance on foreign goods shrinks, reinforcing the cycle.

But here’s the twist: Tariffs can backfire—higher costs may lead to inflation, slowing the very growth they aim to create.