WASHINGTON — President Trump’s tariffs against Canada and Mexico went into effect Tuesday just past midnight, thus putting global markets on edge and setting up costly retaliations by the United States’ North American allies.
Imports from Canada and Mexico are now being taxed at 25%, with Canadian energy products subject to 10% import duties.
The 10% tariff that Trump placed on Chinese imports in February has been doubled to 20%, and Beijing retaliated Tuesday with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
Canadian Prime Minister Justin Trudeau said his country would put tariffs on more than $100 billion of American goods.
Trump's moves raised fears of higher inflation and the prospect of a devastating trade war even as he promised the American public that taxes on imports are the easiest path to national prosperity. He has shown a willingness to buck the warnings of mainstream economists and put his own public approval on the line, believing that tariffs can fix what ails the country.
“It’s a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form,” Trump said Monday at the White House. “And now we’re using them.”
He added there was "no room left" for a deal that would avert the tariffs by curbing fentanyl flows into the United States.
The Canada and Mexico tariffs were going to begin in February, but Trump agreed to a 30-day suspension to negotiate further with the two largest U.S. trading partners. Trump says the reasons for the tariffs is to address drug trafficking and illegal immigration, and both countries say they’ve made progress on those issues. He also said the tariffs will only come down if the U.S. trade imbalance closes, a process unlikely to be settled on a political timeline.
The tariffs could be short-lived if the U.S. economy suffers. In addition, Trump could also impose more tariffs on the European Union, India, computer chips, autos and pharmaceutical drugs. The American president has added a disorienting volatility into the world economy, leaving it off balance as the U.S. and its allies wonder what he will do next.
Democratic lawmakers were quick to criticize the tariffs, and even some Republican senators raised alarms.
