WASHINGTON. In a bold move that risks igniting a new trade war, U.S. President Donald Trump has ordered steep tariffs on imports from Mexico, Canada, and China, effective Tuesday. The tariffs include 25% duties on Canadian and Mexican goods, and 10% on Chinese imports, as part of his ongoing efforts to tackle the fentanyl crisis and illegal immigration.
Trump signed three separate executive orders on the tariffs following a long golf outing in Florida, declaring that the duties would remain in place until the U.S. national emergency regarding fentanyl and illegal immigration is resolved. The tariffs, which apply to a range of goods, have drawn immediate concerns from economists and industry leaders.
“These tariffs will remain until the national emergency is alleviated,” a White House fact sheet stated. However, the specific conditions under which the tariffs could be lifted remain unclear.
The decision to impose tariffs on energy products from Canada at 10%, while Mexican energy imports face the full 25% tariff, reflects a response to concerns from oil refiners and states in the Midwest. According to U.S. Census Bureau data, crude oil imports from Canada totaled nearly $100 billion in 2023, making up about a quarter of all U.S. imports from Canada.
Automakers, particularly in North America, stand to be significantly impacted by these new tariffs, which could disrupt a complex supply chain where car parts often cross borders multiple times before final assembly.
The U.S. move was met with immediate backlash from Canada and Mexico, both vowing to retaliate. Canadian officials have already voiced outrage, with Ontario Premier Doug Ford calling for a “strong and forceful response” to match U.S. tariffs dollar-for-dollar. Nova Scotia’s Premier Tim Houston announced the removal of all U.S. alcohol imports from the province’s shelves. Mexican officials have indicated they will respond with retaliatory tariffs.
In the U.S., Republicans have generally supported Trump’s decision, while business groups and Democrats have warned of the consequences. Jake Colvin, president of the National Foreign Trade Council, cautioned that the tariffs could drive up costs on a wide range of goods, from automobiles to everyday products like avocados. “Our focus should be on working together with Canada and Mexico to gain a competitive advantage and facilitate American companies’ ability to export to global markets,” Colvin stated.
As the tariffs begin on Tuesday at 12:01 a.m. EST, any goods loaded onto a vessel or final mode of transit before 12:01 a.m. Saturday will be exempt. The imposition of these tariffs follows Trump’s declaration of a national emergency under the International Emergency Economic Powers Act and the National Emergencies Act, granting him sweeping authority to implement sanctions.
Economic experts are concerned about the potential impact of these tariffs, with some forecasting that they could reduce U.S. growth by 1.5 percentage points this year, push Canada and Mexico into recession, and lead to “stagflation” in the U.S. – a combination of stagnation and inflation.
On Friday, Mexican and Canadian currencies took a hit, with both the Mexican peso and Canadian dollar falling in response to Trump’s announcement. U.S. stock prices also dropped, while Treasury bond yields rose, signaling increased market volatility.
As the situation unfolds, the global economy remains on edge, with the looming threat of a prolonged trade dispute.
Gary P Hernal started college at UP Diliman and received his BA in Economics from San Sebastian College, Manila, and Masters in Information Systems Management from Keller Graduate School of Management of DeVry University in Oak Brook, IL. He has 25 years of copy editing and management experience at Thomson West, a subsidiary of Thomson Reuters.
- Gary P Hernalhttps://tutubi.ph/author/gary-hernal/
- Gary P Hernalhttps://tutubi.ph/author/gary-hernal/
- Gary P Hernalhttps://tutubi.ph/author/gary-hernal/
- Gary P Hernalhttps://tutubi.ph/author/gary-hernal/
