Tariffs on Canada, Mexico and China will go forward: White House

The White House says President Trump will impose tariffs on imports from Canada and Mexico and additional levies on China on Saturday, fulfilling a major trade threat after weeks of speculation about whether he would follow through.

The package includes a 25% tariff on goods from Canada and Mexico and a 10% tariff on China over the flow of illegal fentanyl into the U.S.

Mr. Trump said he had no choice but to impose levies on Canada and Mexico because of the rate of illegal migration and drug trafficking at U.S. borders. He also doesn’t like the trade deficits that the U.S. runs with those countries, saying they amount to “subsidies.”

Mr. Trump said there was nothing the nations could do to forestall the tariffs and he “absolutely” planned to target the European Union next.

He also said he planned to impose levies on computer chips, oil and gas down the road.

The president said tariffs might cause short-term pain in the form of higher prices but rejected the idea they would fuel the type of price inflation he campaigned against.

---

SEE ALSO: Canada and Mexico brace for Trump’s tariffs with a ‘cool head’

---

“Tariffs don’t cause inflation, they cause success,” he said.

Ms. Leavitt said she would leave it to Mr. Trump to say whether he plans to roll back the tariffs if targeted nations make certain concessions.

Mr. Trump imposed tariffs on China during his first term and President Biden kept many in place. The additional 10% is due to lingering concerns about precursor chemicals that Chinese factors send to Mexico, where cartels manufacture fentanyl, a deadly synthetic opioid that is killing Americans.

A range of products could be caught in the trade spat, ranging from fruits and vegetables and automobiles to toys and clothing.

Officials in Mexico and Canada — for both of whom the U.S. is by far their largest trading partner and export market — said they plan to respond with tariffs of their own.

Many fear the result could be rising prices on consumer and industrial production goods across North America.

“While it is impossible to speculate about what exactly they will do, there’s a real risk of escalation that would ultimately make everyone worse off,” said Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council.

Tariffs are a form of tax or duty paid by importers on the goods they bring in from foreign markets. Mr. Trump says tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.

Presidents can impose tariffs without Congress in certain situations, such as to protect national security or address international emergencies.

The U.S. relied on tariffs as a primary source of government revenue until the federal income tax was imposed in the early 20th century.

“We were at our richest from 1870 to 1913, that’s when we were a tariff country,” Mr. Trump said. “Then they went to an income tax concept, and, you know, how did that work out? It was fine, it was OK. But it would have been very much better.”

Many economists are skeptical of Mr. Trump’s argument that tariffs will be a big revenue generator for the federal government.

Despite Mr. Trump’s assertion, foreign countries don’t pay the tariffs directly to the U.S. Treasury. Companies pay the levies and often pass on at least some of the cost to consumers through higher prices.

Sen. Chris Coons, Delaware Democrat, said tariffs on U.S. neighbors would do “catastrophic damage to our relationships with our allies and raise costs for working families by hundreds of dollars a year. Congress needs to stop this from happening again.”

Mr. Coons and Sen. Tim Kaine, Virginia Democrat, have introduced a bill that would require congressional approval before a president imposed tariffs on U.S. allies or free trade agreement (FTA) partners.

“Congress gave the president the authority to impose tariffs so that he could combat our enemies in the event of a national security crisis, not so that he could pursue grudges against our allies and neighbors,” Mr. Coons said. “If the president is going abuse this power to bully and coerce our allies, Congress should take this authority back.”

Mr. Trump renegotiated the NAFTA free trade agreement during his first term. The U.S.-Mexico-Canada Agreement was considered a major achievement.

Some trade groups warned that supply chains are so intertwined that products might get taxed multiple times. Auto parts, for example, can cross the U.S.-Canadian border multiple times as part of the integrated auto production lines of the major U.S. carmakers.

“One important thing to remember is that a lot of American companies built their supply chains across the North American platform because of the certainty provided by the USMCA agreement that [Mr. Trump] negotiated during his first term. In some cases, a single product may cross the Mexico or Canadian border with the U.S. multiple times throughout the production process, accumulating additional tariff costs each time,” Ms. Smith said.

Major trade groups such as the National Retail Federation oppose tariffs, saying they aren’t the right solution to policy disputes.

“Obviously, there are challenges with some border-related issues,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, which opposes sweeping tariffs. “We think there are other avenues the administration can take to work with Canada and Mexico on those issues.”

The Canadian government dispatched top ministers to Washington this week in a last-minute bid to halt the tariffs, the Canadian Broadcasting Corp. reported Friday, while Prime Minister Justin Trudeau said Ottawa was prepared to retaliate when the tariffs are imposed, including counter-tariffs on targeted U.S. industries and products.

There will be a “purposeful, forceful but reasonable immediate” response, Mr. Trudeau told an event in Toronto Friday, if Mr. Trump follows through on his threats, adding, “It’s not what we want, but if he moves forward, we will also act.”

But he also acknowledged the U.S. tariffs could be painful for Canadians: “I won’t sugarcoat it,” he said.

During an event in Toronto on Friday, Trudeau said that it’s “not what we want, but if he moves forward, we will also act.”

Mexican President Claudia Sheinbaum said she has a range of contingency plans.

“We have a plan A, B and C depending on what the U.S. government decides,” she said at a press conference Friday. “We will always defend the dignity of our people, respect for our sovereignty and a dialogue as equals without subordination.”

Sen. Ruben Gallego, Arizona Democrat, said there will be an immediate impact on the price of avocados, tomatoes, berries and other produce from south of the border.

“Think your grocery bill is high now?” Mr. Gallego wrote on X. “Trump just said he’s going to put a 25% tax on all food and goods from Mexico.”

Sen. James Risch, Idaho Republican and chairman of the Senate Foreign Relations Committee, supported the president’s move.

 “These governments know very well that they need to stem the flow of drugs and illegal immigrants into our country,” Mr. Risch said. “The sooner they do that, the better.”