Trump says 25% US tariff on imports from Mexico, Canada to take effect Tuesday
American president claims ‘no room left’ to delay tariffs on neighbors, in announcement that rattles stock markets; Canada and Mexico both vow to respond
US President Donald Trump said Monday that 25 percent taxes on imports from Mexico and Canada would start Tuesday, sparking renewed fears of a North American trade war that already showed signs of pushing up inflation and hindering growth.
“Tomorrow — tariffs 25% on Canada and 25% on Mexico. And that’ll start,” Trump told reporters in the Roosevelt Room.
“They’re going to have to have a tariff,” he said, adding that there was “no room left” to delay.
Trump has said the tariffs are to force the two US neighbors to step up their fight against fentanyl trafficking and stop illegal immigration. But Trump has also indicated that he wants to even the trade imbalance with both countries as well and push more factories to relocate in the United States.
His comments quickly rattled the US stock market, with the Dow Jones down 1.58%, the S&P 500 down 1.78% and the Nasdaq down 2.47% on the day.
CEOs and economists say the action, covering more than $900 billion worth of annual US imports from its southern and northern neighbors would deal a serious setback to the highly integrated North American economy.
It’s a sign of the political and economic risks that Trump feels compelled to take, given the possibility of higher inflation and the possible demise of a decades-long trade partnership with Mexico and Canada.
Yet the Trump administration remains confident that tariffs are the best choice to boost US manufacturing and attract foreign investment.
Before Trump’s statement on tariffs in response to a question on Tuesday, Commerce Secretary Howard Lutnick said both Mexico and Canada had made progress on border security but needed to do more to curb fentanyl flows into the US to reduce deaths from the opioid drug.
Trump is also expected on Tuesday to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently, unless Beijing ends fentanyl trafficking into the US.
Lutnick did not mention any potential changes to these duties, which would affect about $439 billion worth of annual imports.
Trump provided a one-month delay in February as both Mexico and Canada promised concessions. But Trump said Monday that there was “no room left for Mexico or for Canada” to avoid the steep new tariffs, which were also set to tax Canadian energy products such as oil and electricity at a lower 10% rate.
“If Trump is imposing tariffs, we are ready,” said Canadian Foreign Minister Mélanie Joly. “We are ready with $155 billion worth of tariffs and we’re ready with the first tranche of tariffs, which is $30 billion.”
Joly said Canada has a very strong border plan and explained that to Trump administration officials last week. She said the diplomatic efforts are continuing. She spoke after Trump made his comments Tuesday.
Mexico, after avoiding the first round of Trump’s tariffs by striking a last-minute deal to send thousands of troops to its northern border, has stepped up anti-drug efforts and hinted at new measures on imported Chinese goods.
President Claudia Sheinbaum, in a press conference on Monday before Trump made his remarks, said her government was calm as it awaited Trump’s decision, but that Mexico but will respond if tariffs are imposed.
“We have a plan B, C, D,” Sheinbaum said, without giving any details. She added that coordination with the US on trade and fentanyl trafficking has been “very good.”
