President Donald Trump announced on Monday that tariffs on imports from Canada and Mexico will be implemented starting next month, concluding a month-long delay in the planned tax hikes. “We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” the U.S. president said during a White House press briefing with French President Emmanuel Macron. While Trump was addressing a question specifically about the taxes on the U.S.’s largest trading partners, he emphasized more generally that his “reciprocal” tariffs are set to take effect without delay starting in April. “The tariffs are going forward on time, on schedule,” he added.
Trump has frequently argued that many countries impose unfair import taxes that harm U.S. industries and jobs. He contends that these tariffs will ultimately bring in revenue that can help reduce the federal deficit and create jobs for American workers. “Our country will be extremely liquid and rich again,” Trump declared. However, most economists predict that the financial burden of the tariffs will fall largely on consumers, retailers, and manufacturers—particularly those like auto companies that depend on global supply chains and rely on raw materials such as steel and aluminum, both of which are already subject to a 25% tariff.
Retailers like Walmart have expressed concern about the uncertainty surrounding the tariffs, while the University of Michigan’s consumer sentiment index showed a steep 10% decline over the past month, partly due to worries about the potential impact of tariffs and rising inflation. In the 2024 presidential election, many voters supported Trump, believing he would be able to lower inflation, which had surged to its highest point in four decades under President Joe Biden after the COVID-19 pandemic.
Despite these economic concerns, Trump has remained firm in his stance on tariffs, continuing to call for them even as Macron, standing next to him, suggested that some progress had been made in trade talks. “We want to make a sincere commitment towards a fair competition where we have smooth trade and more investments,” Macron remarked at the press conference, according to a translation of his French comments. He emphasized the goal of ensuring mutual prosperity for both the U.S. and Europe and mentioned that further discussions would be carried out by their teams to explore their ideas in more detail.
Both businesses and the public are still uncertain whether Trump is merely using tariffs as a bargaining tactic or if he genuinely supports these taxes as a means to fund his proposed income tax cuts. The U.S. president has also indicated his intention to end exemptions from the 2018 steel and aluminum tariffs, which would see both metals taxed at a rate of 25%.
Despite ongoing discussions with Canadian and Mexican representatives, Trump confirmed on Monday that he will lift the 30-day suspension of tariffs that had originally been set to take effect in February. He plans to impose a 25% tax on most imports from Mexico and Canada, with energy products such as Canadian oil and electricity facing a lower tariff of 10%. The U.S. president has explicitly stated that these tariffs are intended to pressure Canada and Mexico to do more in addressing illegal immigration and the trafficking of illegal drugs, particularly fentanyl. While the flow of fentanyl from Canada is minimal, the country has appointed a czar to handle the issue, alongside existing measures. Mexico has also moved National Guard members to the U.S.-Mexico border as part of its efforts to address the problem.
Trump also intends to introduce additional tariffs to align with the rates charged by other countries, which could begin as early as April. These tariffs could surpass what other nations charge due to the inclusion of subsidies, regulatory barriers, and value-added taxes (similar to sales taxes in Europe) in the calculations. The potential for retaliatory tariffs from Canada, Mexico, and Europe could escalate into a larger trade conflict, potentially undermining economic growth. A study by Yale University’s Budget Lab in February predicted that the tariffs on Canadian and Mexican goods could reduce average U.S. incomes by between $1,170 and $1,245 annually.
{Matzav.com}