The White House has confirmed the implementation of tariffs initiated by former President Trump, set to begin this weekend, imposing a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese products linked to fentanyl trafficking. Despite ongoing diplomatic efforts from Canada and Mexico, dissatisfaction remains over their responses to drug trafficking. Economic forecasts predict significant declines in GDP for Canada and Mexico, with potential repercussions for the U.S. economy as well.
White House Confirms Tariffs Against Canada, Mexico, and China
On Friday, White House spokesperson Karoline Leavitt declared that the tariffs advocated by former President Donald Trump will officially be implemented starting this weekend. The new tariffs include a 25% charge on imports from Mexico and Canada, along with a 10% tariff on products from China, specifically targeting the illegal fentanyl trade.
Leavitt stated, “The president will impose tomorrow 25% tariffs on Mexico, 25% tariffs on Canada, and 10% tariffs on China for the illegal fentanyl they produce and allow to be distributed in our country.” Trump, who resumed his presidency on January 20, has long threatened these measures against the three nations, accusing them of inadequately addressing fentanyl trafficking and illegal immigration issues affecting the U.S.
International Reactions and Economic Consequences
As the tariffs approach, both Canada and Mexico were hopeful of evading this outcome due to their free trade agreement with the United States. Canadian Public Safety Minister David McGuinty visited Washington on Thursday to propose a security enhancement plan for the Canada-U.S. border. Meanwhile, Mexican President Claudia Sheinbaum expressed ongoing discussions with the U.S. government, asserting progress on various matters.
Despite these diplomatic efforts, Trump remains dissatisfied, blaming the three countries for insufficient action against fentanyl trafficking. Specifically, he accuses China of enabling the export of precursor chemicals to Mexico, where cartels produce the opioid for distribution into the U.S. This sentiment was echoed by Howard Lutnick, Trump’s nominee for Secretary of Commerce, during his Senate confirmation hearing, who described the trade policy as a “domestic policy act” aimed at encouraging border control.
The impending tariffs raise questions about their potential scope and the legal framework Trump will utilize to enforce them. Legal challenges from affected states and businesses could emerge, complicating the situation. The economic ramifications could be considerable, with estimates from Oxford Economics suggesting a possible 1.2 percentage point decline in U.S. economic growth and a recession for Mexico. Joan Domene, an analyst, highlighted that over 50% of Mexico’s exports—comprising food, transportation equipment, and electronics—are vital to its industrial activity.
Wendong Zhang, a professor at Cornell University, predicts a more severe impact on Canada and Mexico, forecasting GDP declines of 3.6% and 2%, respectively, while the U.S. could experience a slight decline of 0.3%. Additionally, an escalation of the trade conflict may impact China, which could both suffer and benefit from the tensions among the U.S., Mexico, and Canada.