President Donald Trump announced extraordinary new tariffs on Mexico, Canada and China — signing the long-promised economic policy at his Mar-a-Lago club on Saturday.
The Trump administration said tariffs are aimed at curbing the flow of drugs and undocumented immigrants into the US, but they potentially risk substantial price increases for American consumers across an array of common goods from avocados to sneakers to cars.
Hours later, Mexican President Claudia Sheinbaum said her country will impose retaliatory tariffs, and Canadian Prime Minister Justin Trudeau announced “far-reaching” retaliatory levies. China’s commerce ministry said it will file a complaint with the World Trade Organisation and “take corresponding countermeasures,” without elaborating.
The tariffs, and subsequent retaliation, risk igniting a trade war that could significantly damage the economies of the targeted countries and the United States. In anticipation, Trump’s executive action includes a clause that allows the president to expand the tariffs if a country imposes new tariffs on the United States.
The new policy represents a reversal of virtually duty-free trade among the three North American nations that’s existed for several years — and an expansion of a frosty trade war between China and the United States that has escalated over the past two administrations.
As Trump has repeatedly promised over the past several months, the tariffs will amount to a significant 25% duty on all imports from Mexico and most goods from Canada, and a 10% tariff on Chinese goods imported into the United States.
The tariffs will have no exemptions, and the executive action Trump signed Saturday will close the so-called de minimis loophole that had allowed shipments of $800 or less to come into the United States tax-free — a key provision used by many American small businesses but also Chinese e-commerce companies such as Shein and Temu. Trump administration officials said the loophole prevented customs officials from properly inspecting those packages.
Although Trump administration officials said Saturday the tariffs were designed to stop the flow of fentanyl and undocumented immigrants, they gave no specific benchmark for the new import taxes to be lifted — other than the cessation of the drugs and undocumented immigrants coming into the country.
Notably, the tariffs included an important carve-out — the tariff on Canadian energy products will be 10%. Many Americans rely on Canadian energy products, including oil, electricity and natural gas, for fuel and home heating. The cost of those items could rise when the tariffs hit.
To put the tariffs in place, Trump in his executive action declared a national economic emergency, invoking the International Emergency Economic Powers Act, known as “IEEPA,” which authorizes a president to unilaterally manage imports during a national emergency. The tariffs are set to go into effect Tuesday at 12:01 am ET.
“Today, I have implemented a 25% Tariff on Imports from Mexico and Canada (10% on Canadian Energy), and a 10% additional Tariff on China,” Trump said in a message posted to Truth Social on Saturday. He said he used the IEEPA “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl. We need to protect Americans, and it is my duty as President to ensure the safety of all.”
New Tarrifs: Igniting a potential trade war
The tariffs could lead to potentially much higher costs, disrupted supply chains and the loss of jobs. In a call with reporters Saturday, a Trump administration official said any retaliation from Mexico, China or Canada would likely result in even higher tariffs for that country. Even Trump acknowledged the potential for adverse consequences on American consumers.
“There could be some temporary, short-term disruption, and people will understand that,” Trump said Friday when pressed by reporters on the cost of tariffs being passed on to importers and, by extension, consumers. “But the tariffs are going to make us very rich and very strong — and we’re going to treat other countries very fairly.”
