Trump imposes tariffs on Canada, Mexico and China, raising prospect of higher costs for US consumers

President Donald Trump signed an executive order on Saturday imposing steep tariffs on goods imported from Mexico, Canada, and China, fulfilling a campaign promise but also raising concerns about price increases for American consumers. This order marks a significant shift in the Trump administration's trade policy.

Trump declared an economic emergency, imposing a 10% tariff on all goods imported from China and a 25% tariff on goods imported from Mexico and Canada, the United States' largest trading partners. However, a 10% tariff rate applies to Canadian oil. The White House stated that Trump's order also includes a mechanism to further increase tariff rates if these countries retaliate against the U.S., which they have previously threatened to do.

Trump claimed that the tariffs are aimed at forcing these countries to do more to stop the flow of fentanyl into the U.S., while also aligning with his stance supporting protectionist measures to boost domestic manufacturing and potentially increase revenue for the federal government. Trump told reporters on Friday, "You see the power of tariffs. Nobody can compete with us because we have the biggest treasury by far."

The Republican president is making a significant political gamble, betting that his actions will not exacerbate inflation, trigger financial shocks that could destabilize the global economy, or provoke a strong backlash from voters. An extensive survey of last year's election voters by the Associated Press VoteCast found that the U.S. is divided on the issue of supporting tariffs. The tariff measures could be short-lived if Canada and Mexico are able to reach agreements with Trump to more aggressively address illegal immigration and fentanyl smuggling.

Trump's actions against China are also tied to the fentanyl issue and are in addition to existing import taxes. Trump is fulfilling promises made during his 2024 White House campaign, which are central to his economic and national security philosophy, although Trump's allies had previously downplayed the threat of higher import taxes as merely a negotiating tactic.