US President Donald Trump is implementing significant tariffs on key trading partners including Canada, Mexico, and China, with a reduced rate for Canadian energy imports, according to the White House.
Exports from Canada and Mexico to the United States will incur a tariff of 25%, while energy resources from Canada will face a lower levy of 10%.
Goods from China, which already have varying duties, will be subject to an added 10% tariff, the White House stated.
The US previously notified Canada to anticipate broad duties on its exports commencing Tuesday, as reported by a Canadian government source to journalists.
Canadian Prime Minister Justin Trudeau remarked that Canada is prepared to deliver “a deliberate, strong, yet reasonable, immediate response.”
The announcement poses potential disruptions across supply chains related to energy, automobiles, and food.
President Trump has consistently shown support for tariffs, indicating that this could be merely the initial step in escalating trade disputes.
Earlier this week, he committed to enforce duties on the European Union.
He has also indicated intentions to impose tariffs on semiconductors, steel, aluminum, and oil and gas—though he has not specified the countries that would be affected.
Mr. Trump returned to his Mar-a-Lago estate in Florida for the weekend without any public engagements listed on his official agenda. He was seen heading to the golf course earlier this morning.
Canadian Prime Minister Justin Trudeau is anticipated to hold a press conference at around 11 PM Irish time, according to two Canadian government sources who spoke to AFP.
Concerns about growth
Implementing extensive tariffs on three pivotal US trading partners carries inherent risks for Mr. Trump, who won the November election partly due to public discontent with the economy.
Increased import costs are likely to “curb consumer spending and business investment,” as noted by EY chief economist Gregory Daco.
He predicts inflation may rise by 0.7 percentage points in the first quarter of this year due to the tariffs before gradually subsiding.
“Heightened uncertainty in trade policy will amplify financial market volatility and exert pressure on the private sector, despite the administration’s pro-business narrative,” Mr. Daco added.
Read more: Trump’s plans for tariffs and tax changes pose risks to the Irish economy – Central Bank
Supporters of the US president have downplayed concerns about tariffs potentially increasing inflation, suggesting instead that his planned tax cuts and deregulation measures could spur growth.
Democratic leaders have criticized Mr. Trump’s plans, with Senate Minority Leader Chuck Schumer stating yesterday:
“I worry these new tariffs will further increase costs for American consumers.”
Mexican President Claudia Sheinbaum stated she has engaged with Mexican business representatives.
Canada and Mexico supply a substantial portion of US agricultural products, with imports from each nation totaling tens of billions of dollars annually.
Tariffs are expected to heavily impact the automotive sector, with US light vehicle imports from Canada and Mexico in 2024 projected to constitute 22% of all vehicles sold in the country, according to S&P Global Mobility.
The research group also reported that automakers and suppliers produce components across the region, implying that tariffs could lead to increased vehicle costs.
Prepared to respond
Mr. Trudeau affirmed that Canada is ready with “a deliberate, strong” reaction.
Doug Ford, the premier of Ontario—Canada’s economic powerhouse—warned on Saturday that “the repercussions of these tariffs will be felt almost immediately,” predicting job losses and a deceleration in business activities.
Canada needs to “respond forcefully and decisively,” he emphasized during a local election campaign event.
Mexican President Claudia Sheinbaum previously indicated her government would await any announcement “with a level head” and has plans in place regardless of the US’s decisions.
Mr. Trump returned to his Mar-a-Lago estate in Florida for the weekend.
Ms. Sheinbaum has consulted with Mexican business leaders, alongside her economy minister Marcelo Ebrard, and conveyed on social media that the private sector is rallying around her in light of potential commercial “arbitrariness.”
White House Press Secretary Karoline Leavitt, however, dismissed concerns regarding a trade war on Friday.
Increasing import taxes on crude oil from nations like Canada and Mexico could result in “significant consequences for US energy prices, particularly in the Midwest,” warned David Goldwyn and Joseph Webster from the Atlantic Council.
According to a Congressional Research Service report, nearly 60 percent of US crude oil imports come from Canada.
