Understanding the Real Costs of Protectionism in a Global Economy

New Tariffs Shake the Global Trade Landscape In February 2025, President Trump implemented a new round of tariffs—25% on imports from Canada and Mexico, 10% on Chinese goods, which doubled to 20% last week, and an additional 10% on Canadian energy. These aren’t marginal partners: in 2024, imports from China, Mexico, and Canada made up over 40% of total U.S. imports. Investors responded predictably—by pulling out of tariff-sensitive sectors, particularly those with elastic demand. On March 11, the U.S. stock market took a noticeable dip as uncertainty spread. So what are tariffs, and what do they actually do to an economy that relies on global integration? Tariffs vs. Free Trade: A Primer Free trade rests on the principle of comparative…