US President Donald Trump has confirmed that his administration will impose 25% tariffs on imports from Canada and Mexico starting Saturday, February 1. However, he noted that a decision on whether these tariffs will apply to oil imports from the two countries remains unresolved.
Speaking to reporters in the Oval Office, Trump framed the tariffs as a response to several issues, including the flow of undocumented migrants, the trafficking of fentanyl across US borders, and ongoing trade deficits with its North American neighbors.
The president also hinted at potential new tariffs on China, reiterating his earlier claim of a 10% levy but providing no further details. “With China, I’m also considering action because they’re sending fentanyl into our country, which is causing hundreds of thousands of deaths,” Trump said. “China will end up paying a tariff for that, and we’re working on it.”
During his 2024 campaign, Trump had threatened to impose tariffs of up to 60% on Chinese-made goods. However, upon returning to the White House, he opted to delay immediate action, instead directing his administration to study the issue.
Since 2018, US imports of Chinese goods have plateaued, a trend economists partly attribute to the escalating tariffs Trump imposed during his first term.
Earlier this month, Chinese Vice Premier Ding Xuexiang addressed the World Economic Forum in Davos, Switzerland, advocating for a “win-win” solution to global trade tensions. While he did not mention the US by name, his comments were widely interpreted as a response to the renewed threat of a trade war under Trump’s presidency.
Meanwhile, Canada and Mexico have vowed to respond to US tariffs with their own measures, even as they seek to reassure Washington that they are addressing concerns about border security and trade imbalances.
The inclusion of oil imports in the tariffs could have significant repercussions. Approximately 40% of the crude oil processed in US refineries is imported, with the majority coming from Canada. Tariffs on these imports could undermine Trump’s promise to reduce the cost of living, as higher energy costs are likely to be passed on to businesses and consumers, potentially driving up prices for everything from gasoline to groceries.
Tariffs, which are taxes on imported goods, are designed to make foreign products more expensive, thereby encouraging consumers to buy domestically produced alternatives. While this can boost local economies, the broader economic impact often includes higher costs for businesses and households.
As the deadline for the tariffs approaches, the international business community is closely watching how Canada, Mexico, and China will respond, and whether these measures will escalate into a full-blown trade war.