Trump to enact tariffs on Mexico, Canada and China starting Feb. 1, White House says
President Trump will enact 25% tariffs on imports from Mexico and Canada starting Feb. 1, as well as a 10% tariff on imports from China, according to White House spokeswoman Karoline Leavitt.
"The president will be implementing tomorrow 25% tariffs on Mexico, 25% tariffs on Canada and a 10% tariff on China, for the illegal fentanyl they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans," Leavitt said at a White House briefing on Friday.
Mr. Trump has said he's targeting Canada and Mexico — the nation's biggest trading partners — along with China, with tariffs to compel them to halt the flow of undocumented immigrants and illicit drugs into the U.S. The president has also said tariffs will generate money for the federal government, although the import duties are paid by U.S. importers. Companies such as Walmart, Target and other U.S. importers typically pass tariff-related costs onto American consumers.
Asked whether Mr. Trump's new tariffs on Mexico, Canada and China would include any exemptions, Leavitt said she didn't have information about that issue.
Mr. Trump's goals include narrowing the trade surplus between those nations and the U.S. The U.S. trade deficit with Canada has surged from $31 billion in 2019 to $72 billion in 2023, largely reflecting growing American imports of Canadian energy. Over that same period, the gap with Mexico has grown from $106 billion in 2019 to $161 billion as the U.S. curtails imports from China and brings more electronic items, shoes and other products from south of the border.
Experts warn that steep new tariffs on imports could cause U.S. economic growth to slow and inflation to flare, noting that companies in the U.S. are likely to pass on the added costs to consumers. A sustained burst of inflation, in turn, could also deter the Federal Reserve from pushing down borrowing costs, according to Wall Street analysts.
Even the prospect of higher import duties is influencing spending by consumers and businesses, according to Oxford Economics. Analysts with the investment adviser note that U.S. imports surged in December, a sign Americans are buying appliances, furniture and other goods now to get ahead of possible price increases.
Retaliation risks
A volley of new U.S. tariffs is likely to invite swift retaliation. Canadian Prime Minister Justin Trudeau said Friday that his country is prepared to fire back if Mr. Trump proceeds with his plan, but he did not give details.
"We're ready with a response, a purposeful, forceful but reasonable, immediate response," he said. "It's not what we want, but if he moves forward, we will also act."
Mexican President Claudia Sheinbaum said Friday that Mexico has conferred with Trump's team since before he returned to the White House, but she emphasized that Mexico has a "Plan A, Plan B, Plan C for what the United States government decides."
"Now it is very important that the Mexican people know that we are always going to defend the dignity of our people, we are always going to defend the respect of our sovereignty and a dialogue between equals, as we have always said, without subordination," she said.
The ultimate economic damage from the U.S. tariffs would hinge on how long they are in place, Wendy Cutler, a former U.S. trade negotiator, told the Associated Press.
If it's just a few days, "that's one thing. If they are in place for weeks onto months, we're going to see supply chain disruptions, higher costs for U.S. manufacturers, leading to higher prices for U.S. consumers," said Cutler, now vice president at the Asia Society Policy Institute. "It could have macroeconomic impacts. It could affect the stock market. Then internationally it could lead to more tension with our trading partners and make it harder for us to work with them."
