WASHINGTON — The White House announced that President Donald Trump will impose 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China, effective Saturday. The administration has not yet clarified whether any exemptions will be granted, raising concerns about price increases for U.S. consumers and potential trade conflicts.
Trump has pushed for these tariffs as a means to pressure trading partners into tightening border security and curbing the smuggling of chemicals used in fentanyl production. He has also framed the tariffs as a strategy to boost domestic manufacturing and generate additional revenue for the federal government.
“Starting tomorrow, those tariffs will be in place,” White House press secretary Karoline Leavitt said Friday. “These are promises made and promises kept by the president.”
Economic and Political Risks
The tariffs present both economic and political risks for Trump, who is just two weeks into his second term. While his campaign promised to reduce inflation, these new trade restrictions could lead to price hikes, particularly in the energy, auto, lumber, and agricultural sectors.
Trump had previously suggested he might exempt Canadian and Mexican oil imports from the tariffs, but the White House declined to confirm any such carveouts. According to the U.S. Energy Information Administration, Canada exported nearly 4.6 million barrels of oil daily to the U.S. in October, while Mexico supplied 563,000 barrels per day.
Market Reaction and Trade Disruptions
Shortly after Leavitt’s announcement, the S&P 500 stock index dropped, wiping out its earlier gains for the day.
Experts predict that Canada, Mexico, and China will retaliate, escalating tensions. Wendy Cutler, a former U.S. trade negotiator, noted that China had aggressively responded to Trump’s first-term tariffs by imposing retaliatory taxes on U.S. farm exports, targeting Trump’s rural voter base.
Canada and Mexico Prepare for Retaliation
Canadian Prime Minister Justin Trudeau confirmed that his government is ready to respond if the tariffs proceed but did not provide specifics.
“We’re ready with a response, a purposeful, forceful but reasonable, immediate response,” Trudeau said Friday. “It’s not what we want, but if he moves forward, we will also act.”
Trudeau warned that the tariffs could have disastrous consequences for the U.S., potentially raising prices and threatening American jobs. He also pushed back against Trump’s claims that Canada plays a significant role in fentanyl smuggling, stating that less than 1% of the fentanyl entering the U.S. originates from Canada.
Mexican President Claudia Sheinbaum echoed similar concerns, stating that Mexico has been in discussions with Trump’s team but is prepared with contingency plans.
“It is very important that the Mexican people know that we are always going to defend the dignity of our people,” Sheinbaum said. “We are always going to defend the respect of our sovereignty and maintain a dialogue between equals.”