Canadian and Mexican exports to the United States will face a 25 percent tariff, although energy resources from Canada will have a lower 10 percent levy, with duties starting as soon as Tuesday.
He invoked the International Emergency Economic Powers Act in imposing the tariffs, with the White House saying “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency.”
Washington additionally accused Mexico’s government of having an “intolerable alliance” with drug trafficking groups.
Trump has repeatedly expressed his love for tariffs, and has signaled that Saturday’s action could be the first volley in further trade conflicts to come.
He has also promised tariffs on semiconductors, steel, aluminum, as well as oil and gas.
Trump, in Florida for the weekend, wrote on social media: “We need to protect Americans, and it is my duty as President to ensure the safety of all.”
“The tariff action announced today makes clear that our friends, neighbors and Free Trade Agreement partners are in the line of fire,“ said Wendy Cutler, vice president at the Asia Society Policy Institute and a former US trade negotiator.
She noted that Canada and Mexico will face domestic pressure to retaliate.
Imposing sweeping tariffs on the three biggest US trading partners in goods carries risks for Trump, who won November’s election partly due to public dissatisfaction over the economy.
He expects inflation would rise by 0.7 percentage points in the first quarter this year with the tariffs, before gradually easing.
Economists also expect growth to take a hit.
Ready to respond
Doug Ford, premier of Canada’s economic engine Ontario, warned of potential job losses and a slowdown in business with tariffs.
Mexican President Claudia Sheinbaum said after the announcement that she was calm as she knows “the Mexican economy is very powerful.”
US Senate Minority Leader Chuck Schumer has warned new tariffs could “further drive up costs for American consumers.”
The tariffs are also expected to hit the auto industry hard, with automakers and suppliers producing components throughout the region.
Nearly 60 percent of US crude oil imports are from Canada, noted a Congressional Research Service report.
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