Trump follows through with trade war threats, slaps tariffs on Canada, Mexico and China

President Trump on Saturday ordered tariffs on Canada, Mexico and China, making good on his threats to punish the U.S. trade partners.

Mr. Trump signed a trio of executive orders slapping tariffs on the countries, arguing that each of their roles in the flow of illegal migrants and illicit drugs, particularly fentanyl, prompted a national economic emergency. 

“We need to protect Americans, and it is my duty as President to ensure the safety of all,” Mr. Trump said on Truth Social. “I made a promise on my Campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it.”

The White House argued in a fact sheet that the president’s decision was made under the International Emergency Economic Powers Act to deal with the “emergency situation” at the southern border. 

“Until the crisis is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff,” the fact sheet read. 

The latest duties will be on top of preexisting tariffs against the countries. Notably, Mr. Trump’s decision to have a lower tariff on energy resources from Canada comes on the heels of a record-breaking year for crude oil imports to the U.S. from the country, according to the U.S. Energy Information Administration. 

Both Mexico and Canada are America’s top trade partners, and the respective leaders of both countries warned that they were ready to strike back if need be. However, the orders have retaliation clauses allowing Mr. Trump to jack up the tariffs even higher should the countries fight back.

Mr. Trump has previously presented his tariffs as an act of last resort to get Canada, Mexico and China to crack down on illegal migration and drug trafficking into the U.S., along with trying to force U.S. companies to return to the country or build new operations stateside. 

Economists and tax experts warn that the move could jack up costs on everyday goods, and translate to an increase in taxes on Americans. 

The president contended that his tariffs might cause short-term pain in the form of higher prices but balked at the notion they would turbocharge inflation, an issue he campaigned vigorously against. 

A recent study published on Friday by the nonpartisan Tax Foundation estimated that 25% tariffs on Mexico and Canada, coupled with a 10% tariff on China, would average out to an average tax increase of $830 per household this year. Over the next nine years, taxes would increase by $1.2 trillion. 

The study noted that during Mr. Trump’s first term, he imposed tariffs that amounted to nearly $80 billion in new taxes between 2018 and 2019. 

Former President Joe Biden kept most of Mr. Trump’s tariffs when he took office, and in May he announced tariff hikes on an additional $18 billion in Chinese goods that amounted to a $3.6 billion tax increase. 

The Tax Foundation’s analysis also estimated that Mr. Trump and Mr. Biden’s tariffs could reduce the country’s economic output and slash 142,000 jobs. 

The Congressional Budget Office also warned in a letter to lawmakers in December that tariffs could jack up prices on everyday goods, but after a year there would likely not be another significant jump. 

Still, the CBO noted, poorer households would be the most affected by the price increases and have their buying power reduced.