TLDR
- Trump announced tariffs on Canada and Mexico will start in March as planned
- The tariffs include 25% on most Mexican goods, 25% on most Canadian products, and 10% on Canadian energy
- Trump also plans to implement “reciprocal” tariffs as early as April
- Mexico’s President Sheinbaum believes agreements can be reached before the deadline
- Economists warn consumers may bear most costs, potentially worsening inflation
President Donald Trump announced on Monday that his planned tariffs on imports from Canada and Mexico will begin next month as scheduled, ending a 30-day suspension period that had paused the implementation of these import taxes.
“We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” Trump stated during a White House news conference alongside French President Emmanuel Macron.
The tariffs were initially set to take effect in February but were paused after both Mexico and Canada pledged to increase their border security efforts. Trump’s order calls for a 25% tax on most Mexican goods and most Canadian products, while Canadian energy products such as oil and electricity will face a lower 10% tariff.
Trump’s announcement comes despite ongoing talks between US officials and their Canadian and Mexican counterparts. When asked directly about the status of these tariffs, Trump was clear: “The tariffs are going forward on time, on schedule.”
The import taxes are being placed on Canadian and Mexican goods with the stated goal of pressuring these countries to address illegal immigration and the smuggling of drugs such as fentanyl. In response to earlier threats, Canada appointed a special czar to address the fentanyl issue, while Mexico has relocated 10,000 members of its National Guard to the US border.
Beyond the Canada and Mexico tariffs, Trump stressed that his planned “reciprocal” tariffs would begin as early as April. These additional tariffs would match or exceed rates charged by other countries, including factors such as subsidies, regulatory barriers, and value-added taxes common in European countries.
“Our country will be extremely liquid and rich again,” Trump claimed, suggesting the tariffs would generate revenue to reduce the federal budget deficit and create new jobs for American workers.
Other countries charge unfair import taxes that hurt American manufacturing
Trump has long maintained that other countries charge unfair import taxes that hurt American manufacturing and jobs. “We’ve been taken advantage of by foreign nations on just about everything,” he said during the press conference, adding: “So the tariffs will go forward, yes, and we’re going to make up a lot of territory.”
Despite Trump’s certainty about moving forward, Mexican President Claudia Sheinbaum expressed hope that agreements could still be reached before the deadline. “We would need to be reaching important agreements this Friday,” Sheinbaum told reporters Monday morning. “On all of the issues there is communication and what we need is to complete this agreement. I believe we’re in a place to do it.”
Sheinbaum indicated she would seek to speak directly with Trump again if needed. She also noted that in high-level discussions between both governments, Mexico has insisted that the US examine drug distribution and consumption within its own borders rather than focusing only on production in Mexico.
The planned tariffs have raised concerns among businesses, economists, and consumers about potential economic slowdowns and higher inflation. Most economists predict that the cost of these taxes will largely be borne by consumers, retailers, and manufacturers such as auto companies that rely on globally sourced materials.
Companies like Walmart have already warned about the uncertainty these tariffs create, while the University of Michigan’s latest consumer sentiment index dropped by about 10% over the past month, partly due to fears about tariffs and worsening inflation.
The timing of these tariffs is particularly sensitive as Trump won the 2024 presidential election largely on voters’ belief that he could cool inflation that had reached a four-decade high during President Joe Biden’s administration following the coronavirus pandemic.
During the joint press conference, Macron appeared to take a different view on trade relations. “We don’t need a trade war,” Macron said in a later Fox News interview. “We need more prosperity together.” Standing beside Trump, he suggested that talks on trade had produced some common ground.
“We want to make a sincere commitment towards a fair competition where we have smooth trade and more investments,” Macron stated, according to a translation of his French remarks. He added that the goal is to help both the US and Europe prosper, with further talks to be carried out by their respective teams.
The possibility of retaliatory tariffs from Canada, Mexico, and Europe has raised fears of a broader trade conflict that could harm economic growth. In February, the Yale University Budget Lab estimated that the Canadian and Mexican tariffs alone could reduce average US incomes by $1,170 to $1,245 per year.
Trump has also recently imposed 10% tariffs on Chinese imports, which has already led China to implement its own targeted tariffs on US goods. This exchange has fueled concerns about an escalating trade war between the two economic powers.
Trump’s tariff plans have left investors, businesses, and the public wondering whether he is using tariff threats as a negotiating tool or truly intends to implement these tax hikes as a way to offset his planned income tax cuts.
The president’s comments on Monday seemed to end any speculation about his intentions regarding the Canada and Mexico tariffs: they will proceed as planned when the suspension period expires in March.
Trump announced these tariffs will proceed despite Trump signing executive orders on February 1 imposing the duties, then pausing them just two days later after receiving commitments from both neighboring countries to enhance their border security efforts.
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