Trump Says Canada, Mexico Tariffs Will Begin in March Amid Inflation Concerns/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Trump announced Monday that tariffs on Canada and Mexico will take effect in March, ending a 30-day suspension. The import taxes, including a 25% tariff on Mexican goods, aim to address trade imbalances and illegal immigration but risk worsening inflation and slowing economic growth. Trump also plans broader global tariffs set to begin in April.
Tariffs & Trade Quick Looks
- Canada and Mexico tariffs: Start in March 2025 after 30-day delay
- Mexican imports: 25% tariff; Canadian energy products: 10% tariff
- Goals: Address illegal immigration, fentanyl smuggling, and trade deficits
- Mexico: Seeking deal before Friday deadline; Canada preparing response
- Economists warn: Consumers likely to bear costs; risk of $1,200 average income hit
- Investors react: S&P 500: -0.7%, Dow: -0.2%, Nasdaq: -1.4%
- Consumer sentiment: Down 10% in latest University of Michigan survey
Trump Says Canada, Mexico Tariffs Will Begin in March Amid Inflation Concerns
Deep Look
WASHINGTON — President Donald Trump confirmed Monday that his administration will begin imposing tariffs on Canada and Mexico next month, following the end of a one-month suspension. Speaking alongside French President Emmanuel Macron at the White House, Trump reiterated his commitment to “reciprocal” tariffs, which he claims will revitalize U.S. manufacturing and reduce the federal deficit.
“The tariffs are going forward on time, on schedule,” Trump said. “Our country will be extremely liquid and rich again.”
The decision follows weeks of negotiations and growing tension with America’s largest trading partners. Tariffs on Mexican imports are set at 25%, while most Canadian goods, including energy products, will face a 10% tariff.
Economic Risks and Inflation Concerns
Economists warn that the tariffs could:
- Increase consumer costs on everyday goods
- Exacerbate inflation already weighing on U.S. households
- Potentially reduce U.S. incomes by $1,170 to $1,245 annually (Yale Budget Lab estimate)
Retailers like Walmart have flagged uncertainty, while the University of Michigan’s consumer sentiment index dropped 10% amid fears of higher prices and slower economic growth.
“Tariffs function as taxes on consumers,” said economist Laura Bennett. “The costs get passed down to everyday Americans.”
Mexico and Canada Respond
Mexican President Claudia Sheinbaum expressed optimism about reaching a deal before Friday:
“We’re in a place to complete an agreement,” she said.
Mexico has deployed 10,000 National Guard troops to the U.S. border and pressed the U.S. to address domestic drug demand rather than solely focusing on Mexican production.
Canada, facing 10% tariffs on key exports, is weighing retaliatory measures. Prime Minister Justin Trudeau’s office has signaled that counter-tariffs could target U.S. agriculture and manufacturing sectors if talks fail.
Macron’s Plea for Diplomacy
During a joint press conference, Macron urged caution:
“We don’t need a trade war. We need more prosperity together,” Macron told reporters, emphasizing the importance of U.S.-European cooperation amid challenges from China’s industrial policies.
Despite Macron’s appeals, Trump stood firm:
“They’ve been taking advantage of us for years,” Trump said. “This is about fairness.”
Broader Trade Strategy: Global Tariffs Ahead
Beyond North America, Trump plans new global tariffs starting in April, aimed at:
- Matching foreign tariffs
- Countering subsidies and VAT schemes used by other countries
- Pressuring trade partners to renegotiate deals
These measures could exceed existing global tariffs and spark retaliatory import taxes from Europe and Asia.
“This is about leveling the playing field,” Trump said. “America won’t be taken advantage of anymore.”
Market Reactions and Investor Jitters
- S&P 500: -0.7%
- Dow Jones: -0.2%
- Nasdaq Composite: -1.4%
Investors fear that higher import costs will dent corporate profits and consumer spending—two pillars of the U.S. economy.
“The market is pricing in prolonged uncertainty,” said analyst Rachel Lee of Beacon Global Advisors.
Economic Outlook
While Trump argues tariffs will boost domestic jobs and industries, most economists caution that:
- Job gains in manufacturing may be offset by higher prices and weaker demand
- Consumers will pay more for imported goods like cars, electronics, and groceries
- Long-term growth could be jeopardized if trade wars escalate
What’s Next?
- Friday: Deadline for Mexico-U.S. tariff negotiations
- March: Tariffs on Canadian and Mexican goods take effect
- April: Global tariff plan launches, heightening trade war risks
Investors and businesses will closely monitor:
- Retaliatory measures from Canada, Mexico, and Europe
- Consumer spending trends amid rising costs
- Inflation data in the coming months
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