Trump says 25% tariffs on Mexico and Canada imports will begin on Tuesday, with no room for delays
WASHINGTON (AP) – The 25% tax on imports from Mexico and Canada will begin Tuesday, raising concerns about a North American trade war that has shown signs of driving inflation and hindering growth, President Donald Trump said on Monday.
“Tomorrow – Canada's tariffs are 25% and Mexico's tariffs are 25%. This will start,” Trump told reporters in the Roosevelt room. “They will have to impose tariffs.”
Trump said the tariffs were to force two U.S. neighbors to strengthen their fight against fentanyl trafficking and stop illegal immigration. But Trump also said he even hopes to imbalance trade with the two countries and push for more factories to relocate in the United States.
His comments quickly shocked the U.S. stock market, with the S&P 500 falling 2% in trading on Monday afternoon. Given the signs of political and economic risks Trump feels had to take, the possibility of decades-long trade partnerships with Mexico and Canada could perish.
However, the Trump administration remains confident that tariffs are the best choice to promote U.S. manufacturing and attract foreign investment. Before Trump’s statement on tariffs was filed on Tuesday, Commerce Secretary Howard Lutnick said C Omputer Chipmaker TSMC expanded its investment in the U.S. as a separate 25% tariff may be required.
In February, Trump imposed 10% tariffs on Chinese imports and re-emphasized on Monday that interest rates would double on Tuesday to 20%.
Trump's promised franchise in Mexico and Canada both provided a month of delays in February. But Trump said on Monday that there is “no remaining Mexico or Canada space” to avoid new tariffs that will also tax Canadian energy products such as oil and electricity at a lower 10% rate.
“If Trump imposes tariffs, we're ready. We're ready to reach a tariff worth $155 billion, we're ready to get the first tariff, which is $30 billion,” said Canadian Foreign Minister Mélanie Joly.
Joley said Canada has a very strong border plan, explaining that to Trump administration officials last week. Diplomatic efforts are continuing, she said. She spoke after Trump commented on Tuesday.
Mexican President Claudia Sheinbaum went to wait for what Trump would say on Monday.
“This is a decision to decide the president of the United States,” Sheinbaum said before Trump's statement. “So whatever his decision is, we will make a decision and there is a plan for Mexico to have unity.”
