Trump says he will proceed with tariffs on goods from Canada and Mexico

President Trump said Thursday he plans to proceed with his plan to impose 25% tariffs on Canada and Mexico on Saturday.

Mr. Trump pointed to illegal migration and drugs from those countries, and trade imbalances he considers to be “subsidies” to U.S. neighbors. He announced Feb. 1 as the start date for the levies shortly after his inauguration.

“We will really have to do that because we have really big deficits with those countries,” Mr. Trump said in the Oval Office. “Those tariffs may or may not rise with time.”

Mr. Trump said the tariffs “may or may not” apply to oil imports. He said he would decide that shortly.

Both U.S. neighbors have warned Mr. Trump that a trade war would be devastating to the intertwined economies of North America.

Canadian officials have threatened to withhold energy exports from the U.S., while Mexican authorities said tariffs would ultimately harm auto workers in the U.S. who work with Mexican counterparts.

Tariffs are a form of tax or duty paid on imports. 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.

The U.S. mostly relied on tariffs as the primary source of government revenue until the federal income tax was imposed in the early 20th century. Some economists are skeptical about using tariffs as a revenue generator, noting among other things how much more the government does now than then, much of it uncontroversial such as building and maintaining a superpower’s military. and funding Social Security, veterans’ benefits and other entitlements.

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 at least some of the cost to consumers through higher prices.