Trump plans tariffs on Mexico and Canada for Tuesday, while doubling existing 10% tariffs on China

February 27, 2025:

WASHINGTON (AP) — Canadian Prime Minister Justin Trudeau says if the United States imposes tariffs, his country has billion of dollars’ worth of U.S. products that’ll be subject to tariffs as well. President Donald Trump says he plans to impose tariffs on Canada and Mexico starting Tuesday (March 4, 2o25) and double the 10% universal tariff charged on imports from China. The Republican president says illicit drugs such as fentanyl are being smuggled into the United States at “unacceptable levels” and import taxes would force other countries to crack down on the trafficking. China’s commerce minister says differences on international trade should be resolved through negotiations. Mexican President Claudia Sheinbaum says she hopes she and Trump can reach an agreement.

February 24, 2025:

WASHINGTON (AP) — President Donald Trump said Monday (Feb. 24, 2025) that his tariffs on Canada and Mexico are starting next month, ending a monthlong suspension on the planned import taxes that could potentially hurt economic growth and worsen inflation.

“We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” the U.S. president said at a White House news conference with French President Emmanuel Macron.

While Trump was answering a specific question about the taxes to be charged on America’s two largest trading partners, the U.S. president also stressed more broadly that his intended “reciprocal” tariffs were on schedule to begin as soon as April.

“The tariffs are going forward on time, on schedule,” Trump said.

Trump has claimed that other countries charge unfair import taxes that have come at the expense of domestic manufacturing and jobs. His near constant threats of tariffs have already raised concerns among businesses and consumers about an economic slowdown and accelerating inflation. But Trump claims that the import taxes would ultimately generate revenues to reduce the federal budget deficit and new jobs for workers.

“Our country will be extremely liquid and rich again,” Trump said.

In a interview with Fox News late Monday, Macron said he hoped he had convinced Trump to avoid a possible trade war, noting the difficulty of taking on a traditional ally such as Europe while simultaneously using tariffs to challenge China’s industrial might.

“We don’t need a trade war,” Marcon said. “We need more prosperity together.”

Most economists say the cost of the taxes could largely be borne by consumers, retailers and manufacturers such as auto companies that source globally and rely on raw materials such as steel and aluminum that Trump is already, separately, tariffing at 25%.

Still, Mexican President Claudia Sheinbaum appeared confident Monday that her administration would reach agreements with the U.S. government before the deadline set by Trump.

“We would need to be reaching important agreements this Friday,” Sheinbaum told reporters Monday morning before Trump’s remarks. “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.”

If necessary, she said she would seek to speak directly with Trump again. In high-level discussions between both governments, Mexico has insisted that the U.S. also take a hard look at the drug distribution and consumption in its own country rather than pointing only at production in Mexico, Sheinbaum said.

Companies like Walmart have warned about uncertainty, while the University of Michigan’s latest consumer sentiment index plunged by roughly 10% over the past month in part due to fears about tariffs and inflation worsening. In the 2024 presidential election, voters backed Trump on the belief that he could cool inflation that had spiked to a four-decade high in the aftermath of the coronavirus pandemic during President Joe Biden’s time in office.

But Trump has persistently threatened tariffs and kept up those calls even as Macron, standing beside him, had previously 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 said at the news conference, according to a translation of his French remarks.

Macron said the idea is to help the U.S. and Europe both prosper, saying that further talks would be carried out by their respective teams to flesh out their ideas.

Investors, businesses and the broader public are still trying to determine whether Trump is merely threatening tariffs as a negotiating tool or if he sincerely backs the tax hikes as a way to offset his planned income tax cuts.

Despite talks the Trump administration has held with Canadian and Mexican officials, the U.S. president signaled Monday that he would end the 30-day suspension of tariffs that were initially set to take effect in February. Trump plans to tax imports from Mexico at 25% as well as most goods from Canada, with energy products such as Canadian oil and electricity being tariffed at a lower 10%.

Trump is placing tariffs on Canadian and Mexican goods with the stated goal of pressuring them to do more to address illegal immigration and the smuggling of illicit drugs such as fentanyl. While relatively little fentanyl comes from Canada, the country announced a czar to address the issue and appease Trump in addition to existing measures. Mexico has relocated 10,000 members of its National Guard to the border with the United States in addition to existing measures.

Trump also plans to impose new tariffs to match the rates charged by other countries. Set to begin as soon as April, the tariffs could be higher than what other countries would charge as subsidies, regulatory barriers and the value added tax — which is akin to a sales tax common in Europe — would be included in the calculations.

The possibility of retaliatory tariffs planned by Canada, Mexico and Europe could lead to a broader trade conflict that sabotage growth. In February, the Yale University Budget Lab estimated that the Canadian and Mexican tariffs could depress average U.S. incomes by $1,170 to $1,245 a year.

February 14, 2025:

WASHINGTON (AP) — President Donald Trump has rolled out his plan to increase U.S. tariffs to match the tax rates that other countries charge on imports. The Republican is possibly triggering a broader economic confrontation with allies and rivals alike as he hopes to eliminate any trade imbalances. Trump said Thursday (Feb. 13, 2025): “I’ve decided for purposes of fairness that I will charge a reciprocal tariff.’ The prospect of a dramatic hike on tariffs could send shockwaves through the world economy, possibly depressing growth while also causing inflation to intensify. Most economists say the tariffs would effectively be a tax increase on U.S. consumers. Trump says he’s decided “for purposes of fairness” that he’ll charge reciprocal tariffs.

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WASHINGTON (AP) — President Donald Trump on Thursday (Feb. 13, 2025) rolled out his plan to increase U.S. tariffs to match the tax rates that other countries charge on imports, possibly triggering a broader economic confrontation with allies and rivals alike as he hopes to eliminate any trade imbalances.

“I’ve decided for purposes of fairness that I will charge a reciprocal tariff,” Trump said in the Oval Office at the proclamation signing. “It’s fair to all. No other country can complain.”

Trump’s Republican administration has insisted that its new tariffs would equalize the ability of U.S. and foreign manufacturers to compete, though under current law these new taxes would likely be paid by American consumers and businesses either directly or in the form of higher prices. The rates to be charged would be studied over the weeks ahead, which could create the potential space to resolve challenges or prolong a degree of suspense and uncertainty.

The politics of tariffs could easily backfire on Trump if his agenda pushes up inflation and grinds down growth, making this a high stakes wager for a president eager to declare his authority over the U.S. economy.

The tariff increases would be customized for each country with the partial goal of starting new trade negotiations. But other nations might also feel the need to respond with their own tariff increases on American goods. As a result, Trump may need to find ways to reassure consumers and businesses to counteract any uncertainty caused by his tariffs.

The United States does have low average tariffs, but Trump’s proclamation as written would seem designed to jack up taxes on imports, rather than pursue fairness as the United States also has regulatory restrictions that limit foreign products, said Scott Lincicome, a trade expert at the Cato Institute, a libertarian think tank.

“It will inevitably mean higher tariffs, and thus higher taxes for American consumers and manufacturers,” he said. Trump’s tariffs plan “reflects a fundamental misunderstanding of how the global economy works.”

Trump’s proclamation identifies value-added taxes — which are similar to sales taxes and common in the European Union — as a trade barrier to be included in any reciprocal tariff calculations. Other nations’ tariff rates, subsidies to industries, regulations and possible undervaluing of currencies would be among the factors the Trump administration would use to assess tariffs.

A senior White House official, who insisted on anonymity to preview the details on a call with reporters, said that the expected tariff revenues would separately help to balance the expected $1.9 trillion budget deficit. The official also said the reviews needed for the tariffs could be completed within a matter of weeks or a few months.

The possible tax increases on imports and exports could be large compared to the comparatively modest tariffs that Trump imposed during his first term. Trade in goods between Europe and the United States nearly totaled $1.3 trillion last year, with the United States exporting $267 billion less than it imports, according to the Census Bureau.

The president has openly antagonized multiple U.S. trading partners over the past several weeks, levying tariff threats and inviting them to retaliate with import taxes of their own that could send the economy hurtling into a trade war.

Trump has put an additional 10% tariff on Chinese imports due to that country’s role in the production of the opioid fentanyl. He also has readied tariffs on Canada and Mexico, America’s two largest trading partners, that could take effect in March after being suspended for 30 days. On top of that, on Monday, he removed the exemptions from his 2018 steel and aluminum tariffs. And he’s mused about new tariffs on computer chips and pharmaceutical drugs.

But by Trump’s own admission, his separate tariffs for national security and other reasons would be on top of the reciprocal tariffs, meaning that the playing field would not necessarily be level.

In the case of the 25% steel and aluminum tariffs, “that’s over and above this,” Trump said. Autos, computer chips and pharmaceuticals would also be tariffed at higher rates than what his reciprocal plan charges, he said.

The EU, Canada and Mexico have countermeasures ready to inflict economic pain on the United States in response to Trump’s actions, while China has already taken retaliatory steps with its own tariffs on U.S. energy, agricultural machinery and large-engine autos as well as an antitrust investigation of Google.

The White House has argued that charging the same import taxes as other countries do would improve the fairness of trade, potentially raising revenues for the U.S. government while also enabling negotiations that could eventually improve trade.

But Trump is also making a political wager that voters can tolerate higher inflation levels. Price spikes in 2021 and 2022 severely weakened the popularity of then-President Joe Biden, with voters so frustrated by inflation eroding their buying power that they chose last year to put Trump back in the White House to address the problem. Inflation has risen since November’s election, with the government reporting on Wednesday that the consumer price index is running at an annual rate of 3%.

The Trump team has decried criticism of its tariffs even as it has acknowledged the likelihood of some financial pain. It says that the tariffs have to be weighed against the possible extension and expansion of Trump’s 2017 tax cuts as well as efforts to curb regulations and force savings through the spending freezes and staff reductions in billionaire adviser Elon Musk’s Department of Government Efficiency initiative.

But an obstacle to this approach might be the sequencing of the various policies and the possibilities of a wider trade conflict stifling investment and hiring amid the greater inflationary pressures.

Analysts at the bank Wells Fargo said in a Thursday report that the tariffs would likely hurt growth this year, just as the possibility of extended and expanded tax cuts could help growth recover in 2026.

Trump tried to minimize the likelihood that his policies would trigger anything more than a brief bump in inflation. But when asked if he would ask agencies to analyze the possible impact on prices, the president declined.

“There’s nothing to study,” Trump said. “It’s going to go well.”

February 5, 2025:

China responded to U.S. President Donald Trump’s tariffs by implementing a 15 percent tariff on coal and liquefied natural gas products.

The Associated Press says China will also impose a ten percent tariff on crude oil, agricultural machinery, and large-engine cars imported from the U.S. Both the 15 and ten percent tariffs will go into effect on Monday (Feb. 10, 2025).

“The unilateral tariff increase by the U.S. seriously violates the rules of the World Trade Organization,” the Chinese State Council Tariff Commission said in a statement. ‘It is not only unhelpful in solving its own problems but also damages normal economic and trade cooperation between the U.S. and China.”

Some experts believe the limited reply of a 10 percent duty to President Trump’s tariffs is an attempt by China’s policymakers to engage the U.S. President in talks to avert an outright trade war between the world’s two largest economies.

February 1, 2025:

PALM BEACH, Fla. (AP) — New trade penalties against Canada, Mexico and China that President Donald Trump plans to impose represent an aggressive early move against America’s three largest trading partners, but at the risk of higher inflation and possible disruptions to the global economy. In Trump’s view, the 25% tariffs against the two North American allies and a 10% tax on imports from Washington’s chief economic rival are a way for the United States to throw around its financial heft to reshape the world. The Republican president is making a major political bet with this expected move on Saturday that his actions won’t worsen inflation, cause financial aftershocks that could destabilize the worldwide economy or provoke a voter backlash.

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PALM BEACH, Fla. (AP) — New trade penalties against Canada, Mexico and China that President Donald Trump plans to impose Saturday (Feb. 1, 2025) represent an aggressive early move against America’s three largest trading partners, but at the risk of higher inflation and possible disruptions to the global economy.

In Trump’s view, the 25% tariffs against the two North American allies and a 10% tax on imports from Washington’s chief economic rival are a way for the United States to throw around its financial heft to reshape the world.

“You see the power of the tariff,” Trump told reporters Friday. “Nobody can compete with us because we have by far the biggest piggy bank.”

The Republican president is making a major political bet that his actions will not worsen inflation, cause financial aftershocks that could destabilize the worldwide economy or provoke a voter backlash. AP VoteCast, an extensive survey of the electorate in last year’s election, found that the U.S. was split on support for tariffs.

It is possible that the tariffs could be short-lived if Canada and Mexico can reach a deal with Trump to more aggressively address illegal immigration and fentanyl smuggling. Trump’s move against China is also tied to fentanyl and comes on top of existing import taxes.

Trump is honoring promises he made in the 2024 White House campaign that are at the core of his economic and national security philosophy, though Trump allies had played down the threat of higher import taxes as mere negotiating tactics.

The president is preparing more import taxes in a sign that tariffs will be an ongoing part of his second term. On Friday, he mentioned imported computer chips, steel, oil and natural gas, as well as against copper, pharmaceutical drugs and imports from the European Union — moves that could essentially pit the U.S. against much of the global economy.

Trump’s intentions drew a swift response from financial markets, with the S&P 500 stock index slumping after his announcement Friday.

It is unclear how the tariffs could affect the business investments that Trump said would happen because of his plans to cut corporate tax rates and remove regulations. Tariffs tend to raise prices for consumers and businesses by making it more expensive to bring in foreign goods.

Many voters turned to Trump in the November election on the belief that he could better handle the inflation that spiked under Democratic President Joe Biden. But inflation expectations are creeping upward in the University of Michigan’s index of consumer sentiment as respondents expect prices to rise by 3.3%. That would be higher than the actual 2.9% annual inflation rate in December’s consumer price index.

Trump has said that the government should raise more of its revenues from tariffs, as it did before the income tax became part of the Constitution in 1913. He claims, despite economic evidence to the contrary, that the U.S. was at its wealthiest in the 1890s under President William McKinley.

“We were the richest country in the world,” Trump said Friday. “We were a tariff country.”

Trump, who has aspired to remake America by using McKinley’s model, is conducting a real-time experiment that the economists who warn tariffs lead to higher prices are wrong. While the tariffs in his first term did not meaningfully increase overall inflation, he is now looking at tariffs on a much grander scale that could push up prices if they’re enduring policies.

Trump has fondly called McKinley, an Ohioan elected president in 1896 and 1900, the “tariff sheriff.”

Brad Setser, a senior fellow at the Council on Foreign Relations, noted on the social media site X that the tariffs “if sustained, would be a massive shock — a much bigger move in one weekend than all the trade action that Trump took in his first term.”

Setser noted that the tariffs on China without exemptions could raise the price of iPhones, which would test just how much power corporate America has with Trump. Apple’s CEO Tim Cook attended Trump’s inauguration last month.

Recent research on Trump’s various tariff options by a team of economists suggested the trade penalties would be drags on growth in Canada, Mexico, China and the U.S. But Wending Zhang, a Cornell University economist who worked on the research, said the fallout would be felt more in Canada and Mexico because of their reliance on the U.S. market.

Canadian Prime Minister Justin Trudeau told Canadians that they could be facing difficult times ahead, but that Ottawa was prepared to respond with retaliatory tariffs if needed and that the U.S. penalties would be self-sabotaging.

Trudeau said Canada is addressing Trump’s calls on border security by implementing a CDN$1.3 billion (US$90 million) border plan that includes helicopters, new canine teams and imaging tools.

Mexico President Claudia Sheinbaum has stressed that her country has acted to reduce illegal border crossings and the illicit trade in fentanyl. While she has emphasized the ongoing dialogue since Trump first floated the tariffs in November, she has said that Mexico is ready to respond, too.

Mexico has a “Plan A, Plan B, Plan C for what the United States government decides,” she said.

Trump still has to get a budget, tax cuts and increase to the government’s legal borrowing authority through Congress. The outcome of his tariff plans could strengthen his hand or weaken it.

Democrats are sponsoring legislation that would strip the president of his ability to impose tariffs without congressional approval. But that is unlikely to make headway in a Republican-controlled House and Senate.

“If this weekend’s tariffs go into effect, they’ll do catastrophic damage to our relationships with our allies and raise costs for working families by hundreds of dollars a year,” said Sen. Chris Coons, D-Del. “Congress needs to stop this from happening again.”

January 31, 2025, update:

WASHINGTON (AP) — President Donald Trump will put in place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective on Saturday (Feb. 1, 2025), the White House said on Friday, but it provided no word on whether there would be any exemptions to the measures that could result in swift price increases to U.S. consumers.

Trump, a Republican, had been threatening the tariffs to ensure greater cooperation from the countries on stopping illegal immigration and the smuggling of chemicals used for fentanyl, but he has also pledged to use tariffs to boost domestic manufacturing.

“Starting tomorrow, those tariffs will be in place,” White House press secretary Karoline Leavitt told reporters. “These are promises made and promises kept by the president.”

Trump had said he was weighing issuing an exemption for Canadian and Mexican oil imports, but Leavitt said she had no information to share on the president’s decision on any potential carveouts.

The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration. U.S. daily production during that month averaged nearly 13.5 million barrels a day.

He has previously stated a 10% tariff on Chinese imports would be on top of other import taxes charged on products from the country.

January 31, 2025:

WASHINGTON (AP) — President Donald Trump said his 25% tariffs on Canada and Mexico are coming on Saturday (Feb. 1, 2025), but he’s still considering whether to include oil from those countries as part of his import taxes.

“We may or may not,” Trump told reporters Thursday (Jan. 30, 2025) in the Oval Office about tariffing oil from Canada and Mexico. “We’re going to make that determination probably tonight.”

Trump said his decision will be based on whether the price of oil charged by the two trading partners is fair, although the basis of his threatened tariffs pertains to stopping illegal immigration and the smuggling of chemicals used for fentanyl.

The risk of tariffs on Canadian and Mexican oil could undermine Trump’s repeated pledge to lower overall inflation by reducing energy costs. Costs associated with tariffs could be passed along to consumers in the form of higher gasoline prices — an issue that Trump placed at the center of his Republican presidential campaign as he vowed to halve energy costs within one year.

“One year from Jan. 20, we will have your energy prices cut in half all over the country,” Trump said at a 2024 town hall in Pennsylvania.

AP VoteCast, an extensive survey of the electorate, found that 80% of voters identified gas prices as a concern. Trump won nearly 6 in 10 voters who said they worried about prices at the pump.

Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, said Trump’s tariffs would “tax America first” in the form of higher costs.

“This is a lose-lose,” Holmes said. “We will keep working with partners to show President Trump and Americans that this doesn’t make life any more affordable. It makes life more expensive and sends our integrated businesses scrambling.”

But Trump showed no concerns that import taxes on the United States’ trading partners would have a negative impact on the U.S. economy, despite the risk shown in many economic analyses of higher prices.

“We don’t need the products that they have,” Trump said. “We have all the oil you need. We have all the trees you need, meaning the lumber.”

The president also said that China would pay tariffs for its exporting of the chemicals used to make fentanyl. He has previously stated a 10% tariff that would be on top of other import taxes charged on products from China.

Oil prices were trading at roughly $73 a barrel on Thursday afternoon. Prices spiked in June 2022 under President Joe Biden to more than $120 per barrel, a period that overlapped with overall inflation hitting a four-decade high that fueled a broader sense of public dissatisfaction with the Democratic administration.

Gas prices are averaging $3.12 a gallon across the United States, roughly the same price as a year ago, according to AAA.

Later on Thursday, Trump threatened more tariffs against countries looking at alternatives to the U.S. dollar as a means of global exchange.

The president previously made the same threat in November against the so-called BRICS group, which includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.

Russian President Vladimir Putin has suggested that sanctions against his country and others mean that nations need to develop a substitute for the dollar.

“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy,” Trump posted on social media.

Trump plans tariffs on Mexico and Canada for Tuesday, while doubling existing 10% tariffs on China

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