U.S. President Donald Trump said on Friday he would impose hefty new tariffs of 25% on goods from Mexico and Canada and 10% on imports from China, and nothing could be done by the three countries to forestall them.
Trump did, however, reference a potential carve out for oil from Canada, saying that rate would be 10% versus the 25% planned for other goods from the United States’ northern neighbor. But he indicated wider tariffs on oil and natural gas would be coming in mid-February, remarks that sent oil prices higher.
Trump has been threatening the tariffs for weeks, saying they would be imposed on Feb. 1 and remain in place until the countries did more to stem the flow of both migrants and fentanyl over the U.S. border.
Speaking to reporters in the Oval Office as he was signing executive orders, Trump said he understood the duties could result in higher costs being passed on to consumers and acknowledged his actions may cause disruptions in the short term. Most economists estimate such sweeping import taxes, and the likely retaliation, would disrupt economic activity around the globe.
Asked if there was any opportunity at this stage for the three top U.S. trading partners to win a delay, Trump said: “No, no. Not right now, no.”
He brushed away the notion his threats for levies have been a bargaining tool. “No, it’s not … we have big (trade) deficits with, as you know, with all three of them.”
“It’s something we’re doing, and we’ll possibly very substantially increase it, or not, we’ll see how it is,” Trump said. “But it’s a lot of money coming to the United States.”
And more tariffs are on the way, the Republican president said, saying import taxes were being considered on European goods as well as on steel, aluminum and copper, and on drugs and semiconductors.
“We’re going to be putting tariffs on steel and aluminum, and ultimately copper. Copper will take a little longer,” he said.
Financial markets have been whipsawed by the rapid-fire but still not fully clear developments on Trump’s tariff plans, with currency trading showing particular volatility. The Canadian dollar and Mexican peso both weakened while Treasury bond yields rose, and stocks ended the day lower.
Still, he said he was not concerned about the reaction of financial markets to his plans to impose tariffs.
“The President will be implementing tomorrow 25% tariffs on Mexico, 25% tariffs on Canada, and a 10% tariff on China for the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans,” White House spokesperson Karoline Leavitt told a press briefing.
Leavitt said details of the tariffs will be released sometime on Saturday.
When Trump imposed punitive duties on Chinese goods in 2018 and 2019, there was typically a lag of two to three weeks for Customs and Border Protection to begin collecting tariffs, due to computer system updates and notices required for importers.
Trump traveled late on Friday to his Mar-a-Lago estate in Florida, saying he would work all weekend there. He was joined on the flight by his commerce secretary nominee Howard Lutnick, who Trump has designated as his trade policy chief.
Major disruptions
Economists and business executives have warned the tariffs would spark increases in the prices of imports such as aluminum and lumber from Canada, as well as fruits, vegetables, beer and electronics from Mexico and motor vehicles from both countries.
Trump again spoke of collecting hundreds of billions of dollars in revenues from other countries, but economists generally say tariffs are paid by firms that import goods and pass the costs on to consumers or accept lower profits.
“President Trump’s tariffs will tax America first,” said Matthew Holmes, public policy chief at the Canadian Chamber of Commerce. “From higher costs at the pumps, grocery stores and online checkout, tariffs cascade through the economy and end up hurting consumers and businesses on both sides of the border.”
Trump’s move is expected to draw retaliatory tariffs, potentially disrupting more than $2.1 trillion in annual two-way U.S. trade with the three trading partners.
Canadian Prime Minister Justin Trudeau on Friday said Canada would immediately respond with forceful countermeasures, adding Canadians could be “facing difficult times in the coming days and weeks.”
Canada has drawn up detailed targets for immediate tariff retaliation, including duties on Florida orange juice, a source familiar with the plan said. Canada has a broader list of targets that could reach C$150 billion ($105 billion) worth of U.S. imports, but would hold public consultations before acting, the source said.
Mexican President Claudia Sheinbaum said she would “wait with a cool head” for Trump’s tariff decision and was prepared to continue a border dialogue.
Sheinbaum previously said Mexico also would retaliate, arguing Trump’s tariffs would cost 400,000 U.S. jobs and drive up prices for U.S. consumers.
China has been more circumspect about its retaliation plans, but has vowed to respond.
China “firmly opposes” Trump’s new duties, a spokesperson for Beijing’s embassy in Washington said, adding: “There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world.”
Reuters
