U.S. President Donald Trump has announced new tariffs, imposing 25% duties on Canadian and Mexican imports and 10% on Chinese goods, citing a national emergency over fentanyl and illegal immigration. Energy products from Canada will face a lower 10% duty, while Mexican energy imports will be taxed at the full 25%.
These tariffs, set to take effect at 12:01 a.m. EST on Tuesday, will remain until the crisis is resolved, though the White House has not specified required actions for exemptions. Trump invoked the International Emergency Economic Powers Act to justify the move, which is expected to face legal challenges.
The decision has sparked backlash, with Canadian and Mexican officials vowing retaliatory tariffs. Ontario Premier Doug Ford pledged a “dollar-for-dollar” response, and Nova Scotia Premier Tim Houston ordered U.S. alcohol removed from store shelves. Canadian Prime Minister Justin Trudeau is expected to respond soon. A senior Mexican official confirmed Mexico will implement retaliatory measures.
Trump’s move follows through on previous threats, raising concerns over economic disruption and a potential trade war. Analysts predict a 1.5 percentage point decline in U.S. growth, with Canada and Mexico potentially entering a recession. The Mexican peso and Canadian dollar weakened, U.S. stocks dipped, and Treasury bond yields rose following the announcement.
Trump, who signed the order while at Mar-a-Lago, insists the tariffs will curb fentanyl trafficking and illegal immigration. White House officials confirmed that Canada will lose the "de minimis" exemption for small shipments under $800, alleging that fentanyl is being funneled through these shipments.
With economic uncertainty looming, global markets remain volatile as businesses and policymakers brace for the impact of these tariffs.