US President Donald Trump announces 25% tariffs on imports from Canada and Mexico starting February 1st

US President Donald Trump has confirmed his intention to impose a 25% tariff on imports from Canada and Mexico, set to take effect on February 1st, 2025. The decision, announced in the Oval Office, marks a significant escalation in trade tensions with the US’s northern and southern neighbours, citing concerns over undocumented migrants, fentanyl trafficking, and trade deficits.

In his comments, Trump indicated that while the new tariffs would impact a wide range of imports, a decision on whether to include oil from these countries is still pending. “We’re taking action because of the problems at the border, particularly the influx of fentanyl and the trade imbalance,” Trump stated.

The move is part of Trump’s broader economic strategy to curb the flow of illegal drugs and migrants into the US, as well as address what he perceives as unfair trade terms. Trump also suggested that additional tariffs on Chinese goods are forthcoming, with a proposed 10% levy, though specifics remain unclear.

“China is responsible for sending fentanyl into our country, causing the deaths of hundreds of thousands,” Trump said. “We’ll be applying a tariff on China for that, and we are working on it.”

The imposition of tariffs on Canada and Mexico has sparked concerns in both countries. Both nations have stated they will respond with countermeasures, while also working to reassure the US that they are addressing border security and trade concerns.

The proposed tariffs could significantly affect US consumers. Canada and Mexico are key suppliers of oil to the US, with Canada providing nearly 40% of the crude used in American refineries. Any additional taxes on this oil could increase energy costs, potentially inflating prices for businesses and consumers alike.

Economists warn that the increased cost of oil could cascade into higher prices for everyday goods, from petrol to groceries, complicating Trump’s promise to lower the cost of living for American families. The oil sector, in particular, may bear the brunt of the tariff imposition, undermining efforts to stabilize the economy.

While tariffs are often seen as a method to encourage the purchase of domestically produced goods, critics argue that the costs are usually passed down the supply chain, ultimately burdening the consumer. Canada and Mexico have indicated their readiness to take retaliatory action, leading to a potential trade war that could disrupt key sectors of the economy.

The announcement also ties into Trump’s broader trade war strategy, which during his previous administration, involved levying tariffs on Chinese-made products, and raising questions about the long-term effects on global trade relations. China, in particular, has been vocal about its opposition to protectionist measures, and discussions continue regarding how the US can balance its trade relationships while protecting domestic interests.

As the clock ticks down to February 1, the international community watches closely, as the repercussions of these tariff increases could extend far beyond the borders of the US, potentially reshaping trade dynamics across North America and beyond.