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Over the weekend, Donald Trump took a bold step by announcing significant tariffs on imports from Canada, Mexico, and China, a move that could spark a fresh wave of trade tensions with three of America’s major partners.
On Saturday, Trump issued an executive order implementing a hefty 25% tariff on all imports from Canada and Mexico, exempting only Canadian oil and energy products, which will face a more modest 10% duty. Notably, Canada represents a significant portion—about 60%—of the US’s imported crude oil. Meanwhile, imports from China were hit with an additional 10% tariff, layered on top of existing tariffs.
Using his platform on Truth Social, Trump justified this decision by invoking emergency powers, citing the “major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”
A White House official explained that the reduced tariffs on Canadian energy aim to lessen the blow on US gasoline and heating costs, though there will be no additional exceptions. The tariffs are set to go into effect on Tuesday, according to a White House statement.
A White House representative proudly termed this move as “a beautiful, beautiful example of promises made, promises kept by President Trump.” They also noted that each order includes a “retaliation clause,” indicating that if any nation chooses to retaliate, further escalations, like increased tariffs, are a possibility.
Though there was no immediate reaction from the affected countries, Canadian Prime Minister Justin Trudeau was anticipated to announce countermeasures later in the evening. China had yet to respond officially.
Industry groups and economists swiftly criticized the tariffs, with the US Chamber of Commerce warning of increased costs for American families and potential disruption to supply chains. The American Petroleum Institute, representing the largest US fossil fuel interests, expressed concerns about the impact on the closely interlinked North American energy markets, emphasizing the importance of free trade.
Trump utilized the International Emergency Economic Powers Act to enforce these duties without Congress’s involvement. This authority allows the president to address emergencies through economic measures and has rarely been used for tariff enactment, though Trump had once considered it in 2019 against Mexico.
This aggressive strategy shatters the expectations of many who hoped for a more measured approach to trade policy following the administration’s detailed reviews of US commercial relationships initiated on Trump’s first day in office. It highlights Trump’s readiness to leverage tariffs to pressure allies on matters ranging from immigration to drug trafficking. Trump’s rationale is rooted in his criticism of perceived lax border security with Mexico and Canada and insufficient efforts by these nations, alongside China, to curb the influx of dangerous opioids into the US.
A White House official stated that these tariffs would be reconsidered “as soon as Americans stop dying from Made in China, distributed by Mexico and Canada fentanyl,” framing the issue primarily as one of border security.
Trump has also pointed to trade deficits with these countries as a reason for his actions. While admitting potential “disruption,” he asserted that the tariffs would ultimately make America “very rich, and very strong.” Additionally, Trump hinted at similar actions against EU imports, though this was not part of Saturday’s announcement.
Interestingly, Trump refrained from imposing the severe 60% tariff on Chinese imports he had once threatened. Instead, the 10% levy aims to penalize Beijing for facilitating the production of fentanyl, a deadly drug that has been a leading killer of Americans aged 18 to 45 in recent years. Although China took action to stop fentanyl exports, suppliers shifted to sending precursor chemicals to Mexican cartels for production.
Dimitry Anastakis, a business professor at the University of Toronto, likened the potential impact of these US tariffs to the disruptive shock of the Covid pandemic, calling the move “unnecessary and quite stupid,” emphasizing that it addresses a “non-existent problem” in an otherwise functioning North American economy. He warned of immediate consequences, including job losses in the auto trade and a potential recession in Canada.
Additional insights were provided by Ilya Gridneff in Toronto and Demetri Sevastopulo in Washington.
