Trump to Impose 25% Tariffs on Canada, Mexico, and 10% on China Starting Saturday
The tariffs could raise prices on a wide range of products, from electronics to food and cars, as consumers and businesses brace for impact.
WASHINGTON — The White House announced Friday that President Donald Trump will implement new tariffs starting Saturday, placing a 25% tariff on goods imported from Canada and Mexico and a 10% tariff on those from China. This move, which could increase costs for U.S. consumers and businesses, comes as the Trump administration seeks to address trade imbalances and the influx of fentanyl from these countries.
Trump had previously promised to impose these tariffs upon taking office, initially targeting February 1 for their implementation. On Friday, White House Press Secretary Karoline Leavitt confirmed that the president would uphold that deadline.
The tariffs are set to cover a wide range of goods, including electronics, toys, clothing, produce, lumber, and automobiles. The new duties will be paid by companies importing these goods into the U.S., similar to a tax. The question for many businesses will be whether they can absorb the extra costs or pass them on to consumers, potentially raising prices across various sectors.
"The tariffs are necessary in part because of the trade deficit the U.S. holds with Canada, Mexico, and China," Trump said Friday. "They are also in response to the import of fentanyl, which is a critical issue for our country." A trade deficit occurs when a country imports more than it exports, and the U.S. has run deficits with these three countries for years.
While some businesses may look for alternative suppliers to mitigate the impact, others may not have such options. With Mexico being a crucial supplier of agricultural products like tomatoes, avocados, and peppers, as well as auto parts, the tariffs could have significant ramifications. The U.S. auto industry, in particular, stands to be hit hard, as its supply chains have been deeply integrated with both Canada and Mexico. Automakers could face higher vehicle production costs, which could, in turn, raise car prices for consumers.
Trump also announced plans to impose additional tariffs on oil and gas imports, computer chips, steel, and aluminum in the coming weeks. Furthermore, he stated his intention to create a "tariff wall" around pharmaceuticals to encourage production in the U.S.
"This will bring a tremendous amount of money into our country," Trump remarked. "The tariff is powerful, and no one can compete with us because we have the largest 'piggy bank.'"
White House officials were quick to address concerns about inflation, pointing to lower inflation during Trump's first term when tariffs were placed on Chinese goods. "President Trump is committed to reducing the inflation crisis caused by the previous administration, and he will continue to use tariffs effectively," Leavitt said.
However, economists have criticized the broader impact of tariffs during Trump’s first term, noting that they led to higher prices for imports, lost manufacturing jobs, and reduced corporate investment due to rising costs for materials and parts.
In response to the new tariffs, both Mexico and Canada have signaled they may retaliate with their own tariffs on U.S. imports. This could affect American industries that rely heavily on exports, such as oil, agriculture, and manufacturing.
Canadian Prime Minister Justin Trudeau expressed concerns about the impact of the tariffs, stating that Canada would take "a purposeful, forceful, but reasonable" approach to retaliate if necessary. "We won’t relent until the tariffs are removed," Trudeau said, noting that Canada was prepared to take all options into consideration.
The auto industry is particularly vulnerable to the proposed tariffs, as the U.S. depends on both Canada and Mexico for auto parts and vehicle manufacturing. With many vehicles crossing borders multiple times during production, the tariffs could lead to significantly higher vehicle prices. Additionally, the U.S. imports substantial amounts of agricultural goods from Mexico, and higher tariffs on these products could exacerbate rising food prices, which have already increased by around 25% over the past four years.
Tariffs on Canadian oil and lumber could also have a domino effect, raising the cost of oil imports and construction materials, which would likely increase the prices of homes and construction projects in the U.S.
As the tariffs go into effect, businesses and consumers alike will feel the financial impact, and the political ramifications of Trump's trade policies will continue to unfold.