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Trump Slaps Tariffs on Mexico, Canada and China in Opening Salvo of Trade War

Vipal Monga in Toronto, Gavin Bade and Brian Schwartz in Washington, and Santiago Pérez in Mexico City

9–11 minutes

Updated Feb. 1, 2025 5:27 pm ET

President Trump on Saturday announced he would impose 25% tariffs on nearly all imports from Canada and Mexico, a 10% tariff on energy products from Canada, and a 10% tariff on China, effective Tuesday, sparking a continental trade war with the first major levies of his second term.

(This is a developing story and will be updated.)

The U.S. notified Canada that it will be imposing a 25% tariff on all imports starting Tuesday, and a lower 10% tariff on Canadian oil and gas, Canadian officials said, as Mexico also braced Saturday for punitive duties from President Trump.

Canada was notified of the U.S.’s decision this morning, according to a senior Canadian government official, adding that they were told that the U.S. action also includes Mexico. Another person familiar with the talks between the three countries said Mexico hasn’t yet been formally notified by the U.S.

Trump had pledged that by Saturday both countries would face universal tariffs of 25%, though Friday floated the idea of a lesser tariff on Canadian oil. He has said the Mexico and Canada tariffs will take effect if the countries don’t take steps to stop migration and drug trafficking over U.S. borders. He also promised to take a combative position with China, and pledged 10% across-the-board tariffs over its role in the fentanyl crisis.

Canadian Prime Minister Justin Trudeau was made aware Saturday that the Trump administration was moving ahead with the tariffs, said Ontario Premier Doug Ford. U.S. Commerce secretary nominee Howard Lutnick made the call to the Canadian government, Ford said, citing Trump’s concerns with fentanyl coming across the border.

The White House didn’t immediately respond to a request for comment.

All eyes were on the White House on Saturday to announce the tariffs after Trump made clear Friday he intended to follow through with them. Speaking in the Oval Office on Friday, the president suggested the Mexico-Canada-China tariffs would just be the beginning, pledging that the U.S. would impose tariffs on computer chips, pharmaceuticals, steel, aluminum, copper, oil and gas imports as soon as mid-February.

“That’ll happen fairly soon,” Trump told reporters in the Oval Office, adding that he also wants to hike tariffs on the European Union, which has “treated us so horribly,” though he didn’t specify when or how high the duties would be. A representative for the European Union didn’t respond to a request for comment.

The announcement for those sector-based and EU tariffs appeared separate from the duties on Mexico, Canada and China that he said would be announced Saturday.

The duties previewed by Trump would come on top of existing tariffs on those products, he said, waving away any concern about the levies increasing inflation or snarling global supply chains.

“I think there could be some temporary, short term disruption and people will understand that,” Trump said. “The tariffs are going to make us very rich and very strong.”

In the short-term, leaders in Mexico, Canada and China—and CEOs of American companies—were hyperfocused on whether the president will include carve-outs for major industries that have lobbied him hard in recent days. His team has been in negotiations over how to potentially dial back tariffs on those countries from the across-the-board version the president has pledged, but officials have warned that Trump may still decide to go through with a full-throated approach.

Trump’s team has also been considering a grace period between the announcement of the tariffs on Saturday and when they would actually be imposed. Leavitt seemed to play down that possibility on Friday, telling reporters Trump “will implement his tariffs tomorrow.”

Stocks pared morning gains and turned negative after her remarks.

Trump told reporters in the Oval Office that there was nothing Canada, Mexico and China could do to avoid the tariffs before Saturday.

The decision on carve-outs for the first round of duties expected Saturday will provide an early indicator on the level of economic risk the president is willing to take in sparking new trade wars and pushing other nations to adhere to his policy demands. For weeks, large U.S. industries such as the oil and automotive sectors have lobbied him for exemptions from the tariffs, warning of higher prices and continental-wide supply-chain issues, while Canada and Mexico have prepared a list of retaliatory measures to hit U.S. products with tariffs in kind.

Trump advisers have considered exemptions for oil imports and automobiles that comply with the U.S.-Mexico-Canada Agreement, the updated Nafta deal that Trump negotiated and signed in his first term.

The China tariff threat, meanwhile, has flown under the radar compared with the North American tariff pledges. While Trump said earlier this week that he was still considering duties on the world’s second-largest economy, he has rhetorically targeted Canada and Mexico much more often, and his team had appeared to have less contact with Chinese diplomats than officials from the U.S.’s continental neighbors.

Depending on carve-outs, this round of Trump tariffs could cover more trade in dollar value than his first-term duties on China. Trump’s four tranches of tariffs on Chinese goods in 2018-19 covered imports valued at roughly $360 billion at the time. New tariffs on Canada and Mexico plus additional tariffs on China would—if all items are subject to the action—cover imports valued at more than $1.3 trillion in 2023.

Canada and Mexico combined supplied about 28% of U.S. imports in the first 11 months of 2024, according to Census Bureau data. China accounted for an additional 13.5%.

U.S. Customs and Border Protection reported that last fiscal year 21,148 pounds of fentanyl was seized at the southwest border, the most from U.S. citizens coming through legal ports of entry. On the northern border, CBP reported seizing 43 pounds of the drug.

Officials from both U.S. neighbors mounted a concerted campaign this week to avoid the tariffs, opening new migration and drug working groups with the administration while also preparing a list of retaliatory measures to hit U.S. products with tariffs in kind.

Throughout the process, Mexican and Canadian officials have expressed frustration that they don’t know what actions would satisfy Trump’s demands, despite weeks of meetings between senior officials. Indeed, the looming tariff announcement Saturday would follow the White House saying publicly this week that negotiations were progressing well with both nations.

On Friday, Trudeau reiterated that Canada would have a “forceful but reasonable” response to U.S. tariffs. He warned that the Canadian economy could suffer. “I won’t sugarcoat it,” he said.

Mexican President Claudia Sheinbaum, meanwhile, said her government is ready for Trump’s tariffs and would respond in kind.

“We have Plan A, Plan B, Plan C for whatever the U.S. government decides,” Sheinbaum said. “It’s important to remember the implications that imposing tariffs could have for the U.S. economy.”

Mexican Economy Minister Marcelo Ebrard said a 25% duty on Mexican goods would have a multibillion-dollar impact on U.S. consumers, affecting millions of households, adding that tariffs would also raise prices of fresh fruit and vegetables, meat and beer.

This week, the United Steelworkers, a powerful union with many members who voted for Trump across the industrial Midwest, called on Trump to back away from across-the-board tariffs. Behind closed doors, the steelworkers union has stressed the importance of Canadian oil to many of its members, pointing out that about 30,000 steelworkers are employed by oil refineries that use Canadian crude—oil that could be replaced by imports from other countries, including Venezuela, if Canadian oil becomes too expensive.

The president hasn’t said which legal authorities would be used to impose the tariffs. Trump advisers had considered using emergency economic authority to impose the sanctions, but The Wall Street Journal earlier reported that aides have second-guessed that strategy after a federal judge temporarily blocked a Trump administration memo seeking to freeze federal assistance grants and loans.

While the U.S., Canada and Mexico have a standing free-trade agreement, it isn’t clear that the expected tariff action would immediately violate that pact. The U.S.-Mexico-Canada Agreement, like most trade pacts, includes a provision that allows for the imposition of tariffs on national-security grounds.

But some veterans of the USMCA talks say Trump’s tariff move strikes them as an abuse of that loophole. The national security emergency exception was meant for “break glass” scenarios, one person involved in the negotiations said, and if it is invoked at “the drop of a hat,” the overall pact is undermined.

Natalie Andrews and Anthony DeBarros in Washington contributed to this article.

Write to Gavin Bade at gavin.bade@wsj.com, Natalie Andrews at natalie.andrews@wsj.com, Vipal Monga at vipal.monga@wsj.com and Santiago Pérez at santiago.perez@wsj.com

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Appeared in the February 1, 2025, print edition as 'President Threatens To Widen Trade War'.

(http://www.autoadmit.com/thread.php?thread_id=5673956&forum_id=2).#48613195)

unless he's just trolling with "tariffs"

(http://www.autoadmit.com/thread.php?thread_id=5673956&forum_id=2).#48613383)