President Donald Trump reaffirmed plans to impose new 25 percent tariffs on all Mexican and Canadian goods beginning Tuesday, likely triggering a trade war with the United States’ biggest trading partners.
There is “no room left for Mexico or for Canada” to make a deal to avoid the tariffs, Trump told reporters at the White House. “They’re all set. They go into effect tomorrow.”
The two countries exported more than $900 billion worth of goods to the United States in 2024, including large amounts of autos and auto parts, agricultural goods and other consumer and industrial products. That equaled about 28 percent of total U.S. goods imports last year.
U.S. automakers have warned the steep tariffs would disrupt supply chains that they have built in Canada and Mexico over the past 30 years and have urged Trump to exempt any auto or auto part imports that comply with the stringent regional content requirements that his administration included in the U.S.-Mexico-Canada Agreement that was negotiated during his first term in office.
However, Trump gave no indication Monday that he plans to grant any such carve-out. What manufacturers will have to do “is build their car plants, frankly, and other things in the United States, in which case they [will] have no tariffs,” he said.
Trump also reaffirmed that he intends to raise his most recent tariff on all Chinese goods. Shortly after the president spoke, the White House released a new executive order amending the tariffs he imposed in February to raise them to 20 percent.
The tariff action culminates months of pressure that Trump has put on all three countries to do more to stop undocumented migrants and fentanyl from entering the United States. The 25 percent tariffs on Canada and Mexico were originally scheduled to take effect in early February, but Trump paused the tariffs for 30 days after speaking with their leaders by phone. That pause expires after midnight Tuesday.
Trump went ahead with a 10 percent tariff on China on Feb. 4. That was in addition to tariffs he imposed on more than $300 billion worth of Chinese goods during his first term. Trump declined to say Monday how much further he was willing to increase tariffs on Chinese goods, saying that would depend on China’s response in addressing his concerns about fentanyl shipments blamed for thousands of U.S. deaths annually.
The Chinese government has already retaliated to Trump’s 10 percent tariff increase and, according to a report in the Chinese news outlet Global Times, is eyeing additional tariffs on “US agricultural and food products” in response to the new hike. Both Canada and Mexico have indicated they would retaliate, as well, if Trump’s tariffs take effect.
“If they want to try to annihilate Ontario, I will do everything, including cut off their energy, with a smile on my face … and I’m encouraging every other province to do the same,” Ontario Premier Doug Ford said Monday during a press conference in Toronto.
Commerce Secretary Howard Lutnick, in an interview on CNN on Monday morning, said Canada and Mexico have done a good job at stopping undocumented migrants from entering the United States, but the two countries still need to do more to stop the flow of fentanyl coming across the border.
The main thing that Mexico and Canada need to do is “get the [drug] cartels to stop sending in fentanyl,” Lutnick added.
“He knows they’ve done a good job on the border. They haven’t done enough on fentanyl,” Lutnick said, just a few hours before Trump spoke.
Trump also signaled Monday afternoon that more tariffs are on the way beginning in early April, when senior administration officials are expected to provide recommendations on his “reciprocal tariff” plan. That is intended to raise U.S. tariff rates to the levels imposed by other countries, taking into account not just traditional duties but also non-tariff, or regulatory, barriers that foreign countries have against U.S. products.
“Reciprocal tariffs start on April 2,” Trump said, joking that he didn’t want to do it on April 1, because it’s April Fool’s Day.
He also tried to reassure American farmers, who are likely to be one of the first casualties of any retaliatory tariffs from Canada and Mexico as well as China, that his forthcoming tariffs will ultimately help their bottom lines. In a post on Truth Social on Monday addressed to “the Great Farmers of the United States,” the president wrote, “Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!,” Trump wrote.
However, the United States produces much more than it can consume in many agricultural sectors and relies on export markets to sell the surplus. In other areas, the United States relies on imports for a steady stream of fruits and vegetables throughout the year.
During the White House event, Trump once again displayed his faith in the power of tariffs to ensure other countries treat the U.S. fairly in trade, even though most economists believe the widespread use of tariffs will raise prices and hurt U.S. economic growth. Financial markets reflected that belief Monday, sinking shortly after Trump affirmed the North American tariffs would kick in this week.
The president, however, maintained that it’s other countries that will bear the costs. “They can’t come in and steal our money and steal our jobs and take our factories and take our businesses and expect not to be punished — and they’re being punished by tariffs.”
Tariffs are “a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form,” he said.
Source: Politico