International
White House Confirms New Trump Tariffs on U.S. Top Trading Partners
- Trump to impose tariffs on Canada, Mexico, and China tomorrow.
- Tariffs target illegal migration and fentanyl concerns.
- Experts warn of recession risks and trade war escalation.
The White House has confirmed that President Donald Trump will impose tariffs on Canada, Mexico, and China starting Saturday, escalating trade tensions with the three largest U.S. trading partners.
Trump plans to enforce a 25 percent tariff on imports from Canada and Mexico, citing concerns over illegal migration and the flow of fentanyl into the United States. Additionally, Chinese imports will face a 10 percent duty, with the president blaming Beijing for its role in the global fentanyl trade.
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White House spokeswoman Karoline Leavitt reaffirmed the deadline, stating, “The February 1st deadline that President Trump put into place continues.” She emphasized that the decision was driven by the need to curb the flow of fentanyl, a synthetic opioid that has caused tens of thousands of overdose deaths in the U.S.
Economic Impact and Trade Disruptions
The move has sparked concerns among economists and global financial institutions. Analysts at JPMorgan suggest the tariffs may be a bargaining tool to renegotiate the United States-Mexico-Canada Agreement (USMCA).
However, they warned that dismantling a decades-old trade system could lead to significant economic disruptions.
A report from Oxford Economics predicts that the tariffs could push Canada and Mexico into recession, with the U.S. also facing a potential downturn.
Assistant professor Wendong Zhang of Cornell University highlighted the economic toll, noting:
- Canada could lose 3.6% of its GDP
- Mexico could suffer a 2% GDP drop
- The U.S. could see a 0.3% economic loss
Mexico’s largest export industries, including food, electronics, and automotive sectors, are expected to bear the brunt of the impact. Meanwhile, Canada, which exports nearly 80 percent of its goods to the U.S., is heavily dependent on American trade.
Energy Sector and Consumer Impact
One of the most uncertain elements of the tariff plan is whether oil and energy imports from Canada will be affected. Canadian crude oil accounts for nearly 60% of U.S. crude imports, and a tariff could increase gasoline prices for American consumers.
Tom Kloza of the Oil Price Information Service warned that U.S. refiners reliant on Canadian heavy oil could see significant price hikes, which may ultimately be passed on to consumers at the pump.
Canada and Mexico Prepare Retaliation
The Canadian government has pledged to support affected businesses and workers with financial relief similar to pandemic-era assistance programs.
Mexican President Claudia Sheinbaum confirmed that her administration is in close talks with U.S. officials in hopes of avoiding economic fallout.
China Responds to Trade War Threats
Trump is also considering additional tariffs on Chinese goods, with the possibility of increasing duties to 60 percent or higher on some products.
The Chinese foreign ministry has strongly opposed the measures, stating that a trade war benefits no one and warning that Beijing will defend its national interests.
Despite the tough rhetoric, analysts believe Trump may use tariffs as a negotiation tactic to push for a “grand bargain” with China before the end of his term.
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Financial expert Isaac Boltansky of BTIG noted that Trump is likely to fluctuate between pressure and diplomacy, with consumer goods likely seeing lower tariff increases.
With trade tensions escalating, the global economic impact of Trump’s latest tariff decision remains uncertain, leaving businesses, consumers, and financial markets bracing for the fallout.
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