On Monday (24th), U.S. President Donald Trump announced that the plan to impose tariffs on Mexico and Canada would proceed as scheduled after the one-month suspension expires next week.
Tariffs Moving Forward
During a White House press conference, Trump stated that the tariffs were moving forward on time and progressing rapidly. He reiterated that the U.S. is being taken advantage of by foreign countries in multiple ways and is being treated unfairly by many trading partners, not just Canada and Mexico.
As a result, Trump confirmed that the tariffs would be implemented, emphasizing that the U.S. would “make up a lot of territory.”
Tariff Details and Initial Suspension
Earlier this month, Trump signed an executive order imposing:
- A 25% tariff on products imported from Mexico and Canada.
- A 10% tariff on Canadian energy products.
In response, Canadian Prime Minister Justin Trudeau announced a 25% retaliatory tariff on U.S. goods worth 155 billion Canadian dollars.
However, two days later, after the leaders of Mexico and Canada pledged to strengthen border security, Trump temporarily suspended the tariffs for 30 days to allow for further negotiations. Canada also halted its retaliatory measures.
With the suspension set to expire, the tariff increase is now scheduled to take effect on March 4.
Economic and Political Reactions
Since his election victory last year, Trump has repeatedly used tariffs as a tool to pressure the U.S.’s largest trading partners, citing concerns over illegal immigration and drug smuggling.
Analysts warn that these tariffs could:
- Trigger a trade war with Mexico and Canada.
- Undermine the United States-Mexico-Canada Agreement (USMCA).
- Increase costs for American consumers.
Even within the U.S., concerns over these tariffs are growing.
Last week, Chicago Federal Reserve President Austan Goolsbee, a 2025 FOMC voter, expressed worries that large-scale tariffs could cause a severe supply shock, worsening inflation similar to what was experienced during the COVID-19 pandemic.
Texas billionaire and real estate developer Ross Perot Jr., a prominent Republican donor, also criticized the move, warning that the tariff threats create uncertainty and could deter business investment.
He stated:
“This will lead to inflation and confusion.”
Conclusion
With the tariff deadline approaching, businesses and investors are closely watching the potential economic impact of these measures. The coming weeks will reveal whether negotiations can prevent further escalation or if a trade conflict between the U.S., Canada, and Mexico is inevitable.
