Tariffs Won’t Slam the Economy. Not Unless Consumers Panic.

President Donald Trump’s tariffs against Canada, China and Mexico will directly drive a modest economic slowdown in the U.S., but the indirect effects could prove more treacherous. 

The promised 25% U.S. tariffs on goods from Mexico and Canada, and an additional 10% on China, took effect on Tuesday, prompting immediate retaliation from Canada. Mexico plans to respond this weekend. China imposed additional tariffs on a number of farm products after announcing retaliatory levies in February and challenging the U.S.’s moves at the World Trade Organization.