Tariffs Imposed on Canada, Mexico, and China: A New Trade Policy
Background
Toronto, the commercial capital of Canada on the Great Lakes. Photo by Mwangi Gatheca on UnSplash.
Tariffs Announced
U.S. President Donald Trump has announced that he will impose new tariffs on imports from Canada, Mexico, and China starting Saturday. The tariffs will be 25% on Canadian and Mexican goods and 10% on Chinese products.
According to White House press secretary Karoline Leavitt, the move is due to illegal fentanyl and immigration from Canada and Mexico. “Both Canada and Mexico have allowed an unprecedented invasion of illegal fentanyl that is killing American citizens, and also illegal immigrants into our country,” she stated.
The tariffs will not be exempted, with Leavitt stating, “These are promises made and promises kept by the president.”
Trump’s Comments
Trump told reporters that the tariffs are not meant for negotiation. “It’s a pure economic decision — we have big deficits with, as you know, with all three of them,” he said. “We’re not looking for a concession, and we’ll just see what happens.”
He confirmed that Canadian crude oil will face a 10% tariff, while other Canadian goods will be taxed at 25%. He also announced tariffs on semiconductors, pharmaceuticals, steel, aluminum, oil, and gas. Tariffs on oil and gas will take effect around February 18, with others rolling out in the coming weeks.
Reactions
Outgoing Canadian Prime Minister Justin Trudeau said his country would respond forcefully if the tariffs proceed. “We’re working hard to prevent these tariffs, but if the United States moves ahead, Canada’s ready with a forceful and immediate response,” he posted on social media.
Mexico responded more cautiously, with its economic ministry stating that the U.S. and Mexico are “partners, not competitors.”
Economic Concerns
Economists warn that these tariffs could hurt the U.S. economy. China, Mexico, and Canada supply over one-third of imported goods and services in the U.S.
Brad Setser, a senior fellow at the Council on Foreign Relations, explained that Mexican and Canadian imports make up about 3% of U.S. GDP, while exports to these countries account for 2.5%. A 25% tariff, he said, acts as a tax that will “have an immediate and negative impact on the U.S. economy” and shrink it.
Conclusion
The tariffs imposed by President Trump have been met with reactions from Canada, Mexico, and the global economy. While the move is intended to address concerns over fentanyl and immigration, many economists warn of potential negative consequences for the U.S. economy.
FAQs
Why are the tariffs being imposed?
The tariffs are being imposed due to illegal fentanyl and immigration from Canada and Mexico.
What are the tariffs on?
The tariffs will be 25% on Canadian and Mexican goods and 10% on Chinese products.
Will there be exemptions?
No, there will be no exemptions for the tariffs.
What are the potential consequences of the tariffs?
The tariffs could have a negative impact on the U.S. economy, as they will act as a tax on imports and could lead to higher prices for consumers.
What are the reactions to the tariffs?
Canada and Mexico have responded to the tariffs, with Canada promising a forceful and immediate response and Mexico stating that the U.S. and Mexico are “partners, not competitors.”