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Trump Imposes New 25% Tariffs on Mexico, Canada
President Donald Trump announced on Monday that he will impose new 25% tariffs on goods from Mexico and Canada, effective at midnight. The move comes despite evidence that both countries have made strides in curbing illegal migration and the flow of drugs, including fentanyl, into the U.S., as Trump had demanded.
“The tariffs, you know, they’re all set,” Trump stated at the White House. “They go into effect tomorrow.”
The decision caused sharp declines in all three major U.S. stock indexes by the end of the trading day, raising concerns about the potential economic impact. The tariff hikes are expected to hurt U.S. consumers and businesses, raising prices for Mexican and Canadian imports while reducing demand for their goods.
While the U.S. had initially delayed the tariffs after promises from Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau to take steps on border control and drug trafficking, Trump is moving ahead with the measures.
U.S. Commerce Secretary Howard Lutnick acknowledged Mexico and Canada’s efforts to address illegal migration but emphasized that more action on fentanyl is needed. Despite a reported 15% decrease in fentanyl-related deaths in the U.S., Trump has insisted that the countries haven’t done enough to combat the opioid crisis.
The tariffs could lead to retaliatory measures, with Sheinbaum warning of possible tariffs on U.S. exports and Trudeau planning a 25% tax on U.S. steel and aluminum products, set to take effect on March 12.
Economists predict the tariffs could drive up prices for consumers and businesses, with potential disruptions to trade between the U.S., Mexico, and Canada—America’s top three trading partners. Trump has also signaled additional tariffs on European Union exports, with the EU threatening its own countermeasures.
Despite the potential for short-term economic pain, Trump maintains that the tariffs will ultimately benefit the U.S. economy by encouraging foreign companies to increase domestic manufacturing.