President Donald Trump is preparing to levy 25% tariffs on imports from Canada and Mexico and a 10% tariff on goods from China effective Feb. 1, he reaffirmed Friday, despite concerns about the implication for the global economy.
Trump said the tariffs were not intended as a negotiating tool and that there was nothing the impacted countries could do to reverse his decision.
“In one case, they're sending massive amounts of fentanyl. Killing hundreds of thousands of people a year with a fentanyl and in the other two cases, they're making it possible for this poison to get in number one. And number two, we have big deficits,” Trump said.
This administration has broadly viewed tariffs as a tool to counter the flow of fentanyl, curb illegal immigration, improve trade deficits, and as a source of revenue to offset spending. The president on Friday hinted at further tariffs to come including on computer chips, pharmaceuticals, oil and gas, and metals including steel, aluminum and copper.
The mechanism by which the new tariffs would be levied remained unclear as of Friday evening. Though the White House has multiple avenues by which it could impose such duties, most require some sort of waiting period before the measures take effect. Many experts have suggested Trump could rely upon the International Emergency Economic Powers Act (IEEPA) — which grants the president broad powers to regulate international commerce during times of national emergency — as a means of bypassing such restrictions.
“That's not for me to brief what the details and how this can be done are, but there have obviously been longstanding trade imbalances with these trading partners that have been long running and systemic that affect our national security by eroding our defense industrial base, eroding our manufacturing base,” Stephen Miller, White House deputy chief of staff for policy and homeland security advisor, told reporters.
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Exemptions for specific products in Saturday’s expected announcement have not yet been outlined, though Trump indicated he’d pursue a lower rate for crude oil from Canada.
“I’m probably going to reduce the tariff a little bit on that. We think we’re going to bring it down to 10 percent on the oil,” Trump said.
Just minutes after White House press secretary Karoline Leavitt re-affirming the expected tariff announcement against China, Mexico and Canada during a briefing earlier Friday afternoon, markets reacted to the news: the S&P 500 closed the day down 0.5%, and the Nasdaq down 0.28%.
Mexican and Canadian officials have also threatened to retaliate.
Canadian President Justin Trudeau said Friday his government was “ready with a response — a purposeful, forceful but reasonable, immediate response.” Mexican President Claudia Sheinbaum said she’d wait with a “cool head” before announcing that country’s response, though she noted she will “always defend the dignity of our people.”
Trump’s move follows through on a campaign promise despite growing concerns his tariffs could have drastic implications for the global economy. The president has, so far, brushed aside such concerns as unfounded.
“Tariffs don't cause inflation. They cause success. Cause big success. So we're going to have great success. There could be some temporary short-term disruption and people will understand that,” Trump said.
Most economic experts, meanwhile, believe such a move could ultimately serve to increase inflation and drive up costs for consumers, especially as Mexican and Canadian officials have promised to retaliate should Trump follow through with his tariff threats.
“It would be devastating for all three countries, for the people of all three countries, for the businesses of all three countries, and for America's stature as a reliable trading partner around the world,” Douglas Rediker, managing partner at DC-based political advocacy firm International Capital Strategies and a nonresident senior fellow at the Brookings Institution, told Scripps News. “As a strategic matter, it would almost force Canada and in particular Mexico to look elsewhere for something of a hedge in terms of their trading relationships, because the U.S. would prove itself to be unreliable, even in the context of a trade agreement that is negotiated by the existing president.”
Others, however, pushed back on such concerns.
“For the people that say these are going to cause widespread price increases at the consumer level, it's just not accurate. You know, not only have we never seen that in the history of the economy, but we actually have hard data that shows us that when a tariff is imposed, the consumer, you know, is not impacted in any meaningful way,” said Nick Iacovella, senior vice president of the Coalition for a Prosperous America, which advocates for domestic producers according to its website.
The group is urging the White House to reinstate steel and aluminum tariffs on Mexico.
“We should not allow other countries to violate agreements and use predatory trade that is costing American jobs,” said Iacovella.
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During his last term in office, Trump negotiated the United States-Mexico-Canada Agreement, better known as the USMCA, to facilitate free trade between the North American nations. He praise the measure at the time as the “the largest, most significant, modern, and balanced trade agreement in history.” A presidential memorandum signed his first day in office in his second term instructs the United States Trade Representative to review the agreement’s impact on American workers and make recommendations over American participation in it.
There had been growing concerns in the Biden administration as well about increases in imports of materials from Mexico, according to a former Biden administration trade official.
During his 2024 campaign for president, however, Trump promised to renegotiate the treaty — raising concerns such a move could undercut trade alliances.
“Why does showing that you're not willing to abide by the terms of the existing agreement enhance your ability to negotiate a better agreement later?” Rediker asked.
Conversations about Section 232 tariffs, which conern imports of steel and aluminum, continue, according to a source familiar with the Trump administration’s thinking. Administration considerations on potential universal tariffs are also an ongoing conversation, including on timing, amount and implementation, according to the source.
While the previous administration had overlapping concerns over trade with China, it believed it would be more effective with coordination in the global economy, while universal tariffs as a potential cause of friction with trading partners, according to a former Biden administration trade official.
On Capitol Hill, Democrats decried Trump’s planned move, and even some Republicans expressed unease.
Sen. Pete Welch, a Democrat of Vermont, told Scripps News his takeaway from a recent roundtable with local business leaders was: “Tariffs will cost jobs, market share and inflation. Every cent will increase costs to consumers.”
“This is going to significantly increase the cost of building housing and building out business expansions due to this increase costs of lumber and steel,” echoed Rep. Becca Balint. Vermont shares 90 miles of border with Canada and relies on international trade for economic development.
Though some in the GOP were quick to praise the tariff announcement — Sen. Rick Scott, a Republican who represents Trump’s home state of Florida, introduced a bill Friday to expand tariff powers — that support was far from unanimous in the Republican conference.
“The Maine economy is integrated with Canada, our most important trading partner. Certain tariffs will impose a significant burden on many families, manufacturers, the forest products industry, small businesses, lobstermen, and agricultural producers,” Sen. Susan Collins, Republican of Maine, said in a statement. “I am working with the Trump Administration to help its officials better understand the potential ramifications of certain tariffs on Maine and to find out more about their implementation, scope, duration, and other important information.”
