Trump confirmed 25% tariffs on Canada and Mexico will take effect March 4 and announced a new 10% tax on Chinese imports, escalating trade tensions. He had paused the Canada-Mexico tariffs for a month after border security measures were introduced but recently caused uncertainty over their enforcement. In a social media post, he cited high drug inflows from North American neighbors as a concern.
Trump reaffirmed that 25% tariffs on Canada and Mexico will take effect on March 4 unless drug inflows are curbed, while China will face an additional 10% tariff the same day. This new China duty follows a prior 10% tariff imposed earlier this month. Canadian energy products will be taxed at a lower 10% rate.
The announcement unsettled financial markets, boosting the Bloomberg Dollar Index while the loonie, peso, and yuan weakened. S&P 500 futures trimmed gains, and oil prices rose.Trump linked North American tariffs to global reciprocal duties, confirming the April 2 tariff plan remains unchanged.Canada and Mexico are intensifying lobbying to delay Trump’s tariffs, after past concessions led to a temporary reprieve.
Top Canadian officials, including Public Safety Minister David McGuinty and fentanyl czar Kevin Brosseau, visited Washington to argue against the tariffs and are set to meet Trump’s border czar Tom Homan.Canada and Mexico have stepped up efforts to prevent Trump’s tariffs, with Canada boosting border security and naming a fentanyl czar, while Mexico deployed 10,000 troops.
Canadian Minister McGuinty expressed confidence their actions meet U.S. demands. Mexico’s President Sheinbaum said she is open to speaking with Trump if necessary.Trump’s tariff threats risk a North American trade war, potentially harming U.S. growth, fueling inflation, and triggering recessions in Canada and Mexico.
The deeply integrated supply chains and trade pacts could face disruption, with U.S.-Canada trade at $920 billion and U.S.-Mexico trade at $900 billion in 2023. His new tariffs on China may further strain relations with Beijing.Trump risks backlash as 60% of U.S. adults expect tariffs to raise prices, and 44% see them harming the economy, per a Harris poll.
