President Trump announced steep new tariffs on imports from Canada, Mexico, and China on Saturday. The executive order mandates a 25% tariff on imports from Canada and Mexico and an additional 10% levy on goods from China. The tariffs are set to take effect at 12:01 a.m. Tuesday, with specific exemptions, such as “energy resources” from Canada facing only a 10% tariff.
Following the announcement, Canada and Mexico pledged to issue retaliatory tariffs. Canada’s Prime Minister Justin Trudeau stated that Canada would impose 25% tariffs against $155 billion worth of American goods. Mexican President Claudia Sheinbaum announced a plan to retaliate with measures defending Mexico’s interests.
China also signaled its intention to challenge the tariffs through the World Trade Organization. In a Truth Social post, Mr. Trump acknowledged that the tariffs might cause “some pain” but insisted that his vision for the country would ultimately justify the costs.
He emphasized the measures were part of a strategy to curb undocumented immigration and illicit drug flow, spur domestic manufacturing, and raise federal revenue.
trump’s new tariffs face backlash
The announcement has sparked significant backlash.
John Murphy, senior vice president for the U.S. Chamber of Commerce, criticized the decision, asserting that it would only raise prices for American families and disrupt supply chains. Agricultural groups, including Farmers for Free Trade, warned that tariffs on Canada, Mexico, and China could have severe consequences for American farmers, who heavily rely on these markets. Experts predict that the impact of these tariffs could affect the economies of Canada, Mexico, and China and drive up inflation in the U.S. Wendong Zhang, an economics professor at Cornell University, estimated that Canada’s economy might shrink by 3.6% and Mexico’s by 2%.
In the U.S., inflation could rise by as much as 1 percentage point, escalating to 4% yearly. Gregory Daco, EY Chief Economist, warned that the tariff increases could create a stagflationary shock and trigger financial market volatility. Consumer behavior might change as well, with some buying goods in anticipation of price hikes due to the tariffs.
Automobiles could see an average price increase of $3,000 each, given the substantial number of cars built in Canada and Mexico, according to TD Economics. The new tariffs mark a significant shift in President Trump’s trade policy, signaling a departure from his campaign promise to reduce everyday costs for Americans. As the tariffs come into effect, both businesses and consumers brace for potential economic impacts.
