President Donald Trump has signed tariffs on goods that arrive in the United States from Canada, Mexico and China, said the White House on Saturday, increasing the risk of a commercial war with the closest commercial partners in the United States and threatening to increase the Prices at all, from cars to avocados.
It is not clear when tariffs will come into force.
Canadian energy products would have a lower tariff rate than 10%.
Trump said he was imposing rates because he said that countries were allowing fentanil to enter the United States, more than 107,000 people died from drug overdose in 2023, with almost 70% of those opioid deaths, including fentanyl. Trump also said that tariffs were in response to a commercial deficit between the US and the three countries because the United States matters more of them than exports.
Economists from all over the political spectrum expect tariffs to increase what consumers pay for a variety of goods, including vehicles, electronic products, products and wood. Companies that import goods to the US. UU. Pay tariffs to the US, similar to a tax.
While some companies will look for goods in another place, others without alternatives will be forced to pay the rates. That means that US grocery stores will assume higher costs for fruits and vegetables cultivated in Mexico; Housing builders will pay more for Canadian wood; And car manufacturers will have to pay a rate every time a component crosses the northern or south border, which happens repeatedly during the production of a single vehicle.
Companies will have to decide whether to pass these higher costs to consumers or absorb them, which will abalotate or require cuts to protect their margins. The implications could be of great reach throughout the economy of the United States, partly because US consumers and companies imported more goods from Mexico than any other country.
Trump made tariffs focused on his campaign to improve an economy that many voters cited as their reason to return it to the White House. He has argued that taxes would protect the US industries from unfair competition by making foreign goods more expensive and encouraging companies to manufacture in the US. UU. It has also proposed to use the income of tariffs to pay other priorities of policies and deploy them as a negotiation tool.
“This is a beautiful and beautiful example of promises made, promises maintained by President Trump,” said a senior administration official.
The official said there were no specific actions that the US was looking for the three countries to take tariffs, but rather the end of illegal immigration and fentanyl.
“There will be a wide range of metrics, and in the golden age of Donald Trump we will only have legal immigration and we will have zero Americans who die from the Chinese, Mexican and Mexican Canadian Fentanyl,” said the official.
But economists have discovered that Trump’s rates imposed on China during his first term did little to achieve those goals. Instead, they led prices for many imports, led to a net loss of manufacturing jobs and reduced corporate investments. Almost all the income collected from Trump’s previous tariffs on China went to payments that sent US farmers to compensate for their losses of the rates imposed in response. The taxes also did not generate significant Beijing concessions, which has not fulfilled many of its commitments under a negotiated trade agreement during Trump’s first mandate.
The president’s latest rates on Canada and Mexico threaten to fly one of its characteristic commercial pacts, the United States-México-Canada agreement. Trump had promoted the agreement as a victory, since it greatly allowed the products to move among the three free countries, as they had done for decades under the NAFTA agreement that the USMCA replaced. The current commercial agreement is not in review until July 2026, but the new tariffs could endanger it much earlier.
“This is not changing the work of another administration. This is he changing the work of his administration, ”said Francisco Sanches, an international trade lawyer from Holland and Knight and former Undersecretary of Commerce of the United States for Commerce during Obama Administration.
The White House said Trump would issue tariffs under the International Law of Emergency Economic Powers. Despite the USMCA, Trump said he has the legal authority to regulate imports during a national emergency, which he declared on the southern border on his first day in office.
Although most Trump’s tariff threats during his campaign focused on China, his focus on Canada and Mexico has increased since he was chosen. Both countries promised to retaliate, which would make American products less competitive within their borders and hurt the businesses of the United States that sell there. Cars, oil and gas, electronics, industrial equipment and agricultural products are among the main US exports to Canada and Mexico.
“What we have seen in this type of circumstances when the United States has imposed tariffs on another country is an attempt by our commercial partners to address the interested parties and really sensitive locations,” said Greta Peisch, a Wiley Rein trade lawyer who He was general lawyer for the United States commercial representative during the Biden Administration. “They are very intelligent and understand how our process works and what makes an impact potentially.”
A senior administration officials said there is a “retaliation clause” in the executive order that issues the tariffs where if any country chooses to retaliate to the United States it will take more measures.
A commercial war between the three countries would reduce economic growth for all of them, but could especially affect Mexico, according to an analysis of the Peterson Institute.
“For Mexico, a 25% tariff would be catastrophic. In addition, the economic decrease caused by the rate could increase incentives for Mexican immigrants to cross the border illegally in the United States, directly contradicting another priority of the Trump administration, “the report said.
The US automotive industry is among the most vulnerable to tariff impacts. For decades, their supply chains have been strongly intertwined with the residents of the United States to the north and south. As vehicles and components cross several times during the production process, repeated repetitions of 25% could quickly increase vehicle costs.
The United States also depends on the agricultural products of Mexico, one of the main suppliers of tomatoes, avocados, berries and peppers. The increase in food prices has been a great concern for consumers and voters, with supermarket costs in about 25% in the last four years. – A problem that Trump hit the campaign.
After its previous threats, Mexico threatened the retaliation tariffs in the American goods sold there, which add up to $ 360 billion. That could damage companies that sell Mexican consumers.
Together with immigration, Trump and legislators have expressed concern that China could be using Mexico as the rear door to the United States to avoid paying tariffs. Mexico has seen an increase in manufacturers that move there from China as a way to avoid the tariffs Trump put in China during his first term. The investment agreements announced by Chinese companies in Mexico have increased in recent years, according to data compiled by the research firm Rhodium Group.
Tariffs in Canada are expected to generate prices of Canadian wood, known for being lighter and easier to work, said Dustin Jalbert, a senior economist of wood products in Fastmarkets.
Canadian wood factories have already been fighting the previous tasks imposed by the United States in recent years and the destruction of millions of forest acres of a beetle pine infestation. More rates could hinder the industry even more, he said.
“Consumers will pay that in some way because in the end, they have less supply available in the market, and prices will be somewhat higher on the margin,” Jalbert said.
That could maintain pressure on the prices of homes that are already beyond the reach of millions of Americans, warned the National Association of Housing Builders.
Tariffs could also increase gasoline prices, since crude oil is among Canada’s main exports to the United States, which hinders Trump’s ambitious vote to reduce energy costs in his first 12 months .