He plans 25% tariffs on Canadian and Mexican imports and 10% on Chinese goods.
Analysts warn these tariffs could disrupt supply chains and risk recessions in Canada and Mexico.
US President Donald Trump will implement tariffs on the three largest US trading partners – Canada, Mexico and China – saying there was nothing they could do to forestall him while vowing further levies on various industries.
“Both Canada and Mexico have allowed an unprecedented invasion of illegal fentanyl that is killing American citizens, and also immigrants into our country,” she told reporters.
She did not commit to exemptions on sectors, and rejected warnings that this would spark a trade war.
Donald Trump will implement tariffs on Canada, Mexico and China, citing issues with illegal migrants and fentanyl. Photo / Getty Images
Beyond the three countries, Trump told reporters that tariffs on oil and gas could arrive around February 18.
“Eventually we’re going to put tariffs on chips, we’re going to put tariffs on oil and gas,” he said, without specifying which countries he would target.
He also vowed to impose higher duties on steel and aluminium, and eventually copper imports.
Washington was “absolutely” going to impose tariffs on the European Union in the future as well, Trump said, adding that the bloc “has treated us so terribly”.
Canadian Prime Minister Justin Trudeau vowed an “immediate response” if Trump acted, while Mexican President Claudia Sheinbaum said her government was in close contact with Trump’s administration.
Trump has not specified tools he would use, though analysts suggest he could tap emergency economic powers, which allow the President to regulate imports during a national emergency.
Beijing has rebuffed claims of its complicity in the deadly fentanyl trade. Close US ally Canada has countered that below 1% of undocumented migrants and fentanyl entering the US comes through its northern border.
Some analysts believe tariff threats are a bargaining chip to accelerate the renegotiation of the existing trade deal, known as USMCA, between the US, Mexico and Canada.
But tariff hikes on the trading partners would likely prove a major shock, shaking up supply chains.
Oil in focus
Asked if tariffs would include Canadian crude oil, Trump told reporters: “I’m probably going to reduce the tariff a little bit on that.”
“We think we’re going to bring it down to 10%,” he added, noting that upcoming tariffs would come on top of existing rates.
Nearly 60% of US crude oil imports are from Canada, noted the Congressional Research Service.
Canadian heavy oil is refined in the United States and regions dependent on it may lack a ready substitute.
Canadian producers would bear the brunt of tariffs but US refiners would also be hit with higher costs, said Tom Kloza of the Oil Price Information Service. This could bring petrol price increases.
Recession risks
Erica York of the Tax Foundation said the Canada, Mexico and China tariffs would shrink economic output by 0.4% and amount to “an average tax increase of more than $830 per US household in 2025”.
Oxford Economics analysts warned that blanket tariffs and pushback could tip Canada and Mexico into recessions, adding that the United States also risks a shallow downturn.
US merchandise imports from both countries largely enter duty free or with very low rates on average, said the Peterson Institute for International Economics.
A tariff hike would likely shock industrial buyers and consumers.
Trump is also mulling more tariffs on Chinese goods.
Beijing has vowed to defend its “national interests,” and a foreign ministry spokeswoman previously warned that “there are no winners in a trade war”.
During election campaigning, Trump raised the idea of levies of 60% or higher on Chinese imports.
Isaac Boltansky of financial services firm BTIG expects “incremental tariff increases” on Chinese goods.
“Our sense is that Trump will vacillate between carrots and sticks with China, with the ultimate goal being some sort of grand bargain before the end of his term,” he said in a note.
