Trump imposes new tariffs on Mexico, Canada and China starting today - White House

Trump imposes new tariffs on Mexico, Canada and China starting today - White House

Agencies

01/02/2025


President Trump has used and promised to use tariffs for three main purposes: raising revenues, offsetting trade and bringing rival countries to the negotiating table. - Reuters Image


WASHINGTON: US President Donald Trump will continue with the implementation of aggressive new tariffs on Canada, Mexico and China today, according to the White House.

The US administration also confirmed that Trump will stick to the February 1 deadline for new duties that could have a major impact on the economy.

"I can confirm that tomorrow, the February 1 deadline set by President Trump through a statement a few weeks ago will continue to be in effect," White House Press Secretary Karoline Leavitt said at a briefing on Friday. Canadian officials met with the White House border chief, Tom Homan, on Friday in an effort to reach an agreement to avoid the proposed tariffs, according to two sources familiar with the meeting.

However, Leavitt's confirmation of the new tariffs appears to put an end to speculation about whether the President will fulfil his promise as a candidate to impose the new tariffs.

He said the tariffs would involve a 25 percent duty on Mexico and Canada as well as a 10 percent tariff on China "because the illegal fentanyl they supply and allow to be distributed to our country has killed tens of millions of Americans."

"This is a promise made and a promise kept by the President," Leavitt said.

Leavitt, however, declined to provide additional details on the new tariffs, including whether they will be imposed on oil imports or if there are additional exemptions.

He also did not provide details on how the tariffs will be implemented, saying only that full details will be available for public viewing in the next 24 hours.

At the same time, he did not specify whether the tariffs would be imposed on oil imports or if there were other exceptions.

Imposing hefty tariffs on major U.S. trading partners is a bet that tariffs on American companies on imported goods will ultimately penalize the countries that produce the goods Americans want — and bring those countries to the negotiating table.

Still, it is also a risky bet that can adversely affect American consumers and the country's economy.

Trump this week rejected the idea that American consumers rely on imports from his two North American neighbors.

"We don't need what they have," Trump said, referring to Canada and Mexico.

Economists generally believe that under certain circumstances, tariffs can be an effective tool for economic growth.

Trump has used and promised to use the tariffs for three main purposes: raising revenues, offsetting trade and bringing rival countries to the negotiating table.

President Trump also stressed that he wants Canada and Mexico to stop the flow of undocumented immigrants and illegal drugs to the United States.

As for China, Trump said the tariffs were aimed at forcing the country to fulfil a promise made to him that the Chinese government would execute anyone found to be sending fentanyl to the US.

Mexico's president said on Friday that his country awaits any potential tariffs from the U.S. "with great calm."

"We have Plan A, Plan B, and Plan C for whatever decision the U.S. government makes.

"It is very important for the Mexican people to know that we will always defend the dignity of our people, our sovereignty, and negotiate on an equal footing," President Claudia Sheinbaum told reporters in a daily news conference.

"No one — on both sides of the border — wants to see American tariffs imposed on Canadian goods," Canadian Prime Minister Justin Trudeau said Friday evening in a statement on X.

"I have met with our Canada-US Council today. We are working hard to prevent these tariffs, but if the United States goes ahead with them, Canada is prepared with a firm and immediate response," he added.

A delegation of senior Canadian officials has been in Washington for several days, meeting with various administration officials to try to prevent the imposition of a 25 per cent tariff.

Canada's closed-door efforts could become more aggressive if the tariffs are enforced.

Provincial heads from across Canada - led by Ontario Prime Minister Doug Ford - plan to travel to Washington on February 12 for a larger mission.

Under certain circumstances, tariffs do not cause inflation problems. The tariffs imposed by Trump during his first term did not significantly increase inflation, although the scope is much smaller than what he is now proposing and the COVID-19 pandemic has affected some aspects of inflation related to tariffs – many of which still remain in place during the Joe Biden administration.

Still, most major economists agree that tariffs cause inflation.

This is because the tax is actually paid by the importer – not by the exporting country – and the cost is usually passed on to the consumer in the form of a higher price.

New research from the Peterson Institute for International Economics shows that Trump's aggressive tariff campaign will force American consumers to pay more for almost everything — from foreign-made shoes and toys to food.

Trump's proposed tariffs could add to the tax burden by US$272 billion a year, according to Karl Schamotta, chief market strategist at Corpay Cross-Border Solutions.

The Peterson Institute estimates that Trump's proposed tariffs will cost more than US$2,600 a year for each American household.

Nevertheless, some supporters of Trump's plan believe this risk is worth it.

Jamie Dimon, the CEO of JPMorgan, last week told CNBC that if the tariffs cause some inflation but solve the national security issue, then people should "just take it." - Agency