Trump’s administration warned against retaliation from the affected countries – saying further action was possible.
US President Donald Trump on Saturday signed an order to impose stiff tariffs on imports from Mexico, Canada and China, fulfilling a campaign promise but raising the prospect of increased prices for American consumers.
Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada — America’s largest trading partners — except for a 10% rate on Canadian energy, including oil, natural gas and electricity. The tariffs would go into effect on Tuesday, setting a showdown in North America that could potentially sabotage economic growth.
The White House said Trump’s order also includes a mechanism to escalate the rates if the countries retaliate against the U.S., as they have threatened. Both Canada and Mexico have plans, if needed, to impose their own tariffs in response.
The Trump administration put the tariffs in place to force the three countries to stop the spread and manufacturing of fentanyl, in addition to pressuring Canada and Mexico to limit any illegal immigration into the United States.
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.
With the tariffs, Trump is honouring promises that are at the core of his economic and national security philosophy. But the announcement showed his seriousness around the issue as some 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.
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.
