Trump says 25% tariffs on Mexican and Canadian imports will start Tuesday, with ‘no room’ for delay

U.S. President Donald Trump stated on Monday that 25% tariffs on imports from Mexico and Canada will take effect on Tuesday, raising new concerns about a trade war in North America, which has already shown signs of rising inflation and stunted growth, reports AP, writes UNN.

Details

"Tomorrow - a 25% tariff for Canada and 25% for Mexico. And it will start," Trump told reporters in the Roosevelt Room. - "They will have to have a tariff."

Trump stated that the tariff is meant to compel the two U.S. neighbors to strengthen their fight against fentanyl trafficking and stop illegal immigration. But Trump also made it clear that he wants to eliminate trade imbalances for America and push more factories to relocate to the United States.

His comments quickly impacted the U.S. stock market, with the S&P 500 index falling by 2% on Monday afternoon. This is a sign of the political and economic risks that Trump feels compelled to address in light of the possibility of higher inflation and a potential end to the long-standing trade partnership with Mexico and Canada, as tariffs took effect at 12:01 AM local time on Tuesday, the publication writes.

However, it is noted that the Trump administration remains confident that tariffs are the best option to stimulate production in the U.S. and attract foreign investment. U.S. Secretary of Commerce Howard Lutnick stated on Monday that chip manufacturer TSMC has expanded its investments in the United States due to the possibility of implementing separate 25% tariffs.

In February, Trump imposed a 10% tariff on imports from China. On Monday, he reiterated that the rate will double to 20% on Tuesday.

Trump granted a one-month delay in February, as both Mexico and Canada promised concessions. But Trump stated on Monday that "there is no room for either Mexico or Canada" to avoid new high tariffs, which were also imposed on Canadian energy products, such as oil and electricity, at a lower rate of 10%.

Reactions from Canada and Mexico

Canadian Prime Minister Justin Trudeau stated on Monday that "there is no justification" for Trump's tariffs.

The Canadian Foreign Minister stated that her country is ready to respond when President Donald Trump's tariffs take effect on Tuesday.

"Due to the tariffs imposed by the U.S., Americans will pay more for products, gasoline, and cars and potentially lose thousands of jobs," he said. "The tariffs will disrupt incredibly successful trade relations. They will disrupt the very trade agreement that was made by President Trump in his last term."

Trudeau stated that his country will take retaliatory measures by imposing 25% tariffs on U.S. goods worth CAD 155 billion (USD 107 billion) within 21 days, starting with tariffs on CAD 30 billion (USD 21 billion) after midnight local time on Tuesday.

Mexican President Claudia Sheinbaum expressed on Monday that she is waiting to see what Trump will say.

"This decision rests with the U.S. government, with the President of the United States," Sheinbaum said before Trump's announcement. "So whatever his decision is, we will make our decisions, and there is a plan, there is unity in Mexico."

Both countries have tried to demonstrate actions in response to Trump's concerns. Mexico has sent 10,000 National Guard soldiers to their shared border to stop the illegal drug trade and illegal immigration. Canada has appointed a "fentanyl czar," although drug smuggling from Canada to the U.S. appears to be relatively modest.