President Donald Trump announced plans to impose tariffs on Mexico and Canada as soon as February 1. Speaking to reporters on Monday, Trump suggested levies of 25%, citing concerns over border security and trade imbalances.
Trump said:
We’re thinking in terms of 25% (levies) on Mexico and Canada because they’re allowing a vast number of people over the border.
The president specifically labeled Canada “a very bad abuser” and hinted that the tariffs could be broad-based, with additional details yet to be revealed.
Trump’s tariff strategy
While Trump’s intent to implement wide-ranging tariffs has been clear, the timing and scope have been under speculation.
His comments dispelled earlier assumptions that tariffs might focus on specific items or be delayed.
Earlier reports have also suggested the administration is considering 25% tariffs on Canadian goods and 10% duties on all other trading partners, potentially escalating over time.
Such measures could significantly impact Canada’s economy, given that US-Canada trade exceeds half a trillion dollars annually.
Trump also indicated the tariffs aim to pressure Canada and Mexico to combat fentanyl trafficking, tying trade policy to his broader pledge to fight international drug gangs, which he plans to designate as terrorist groups.
Trump also announced the creation of the “Eternal Revenue Service” to collect the tariffs, claiming this new mechanism would bring “massive amounts of money” into federal coffers. Currently, the US Customs and Border Protection handles this role.
“We will tariff and tax foreign countries to enrich our citizens,” Trump emphasized, framing the tariffs as part of his broader agenda to protect American workers and reduce reliance on foreign nations.
Trump on China tariffs
Donald Trump suggested he “certainly could” impose tariffs on China if it failed to approve a deal to sell TikTok to a U.S. company.
“If we wanted to make a deal with TikTok, and it was a good deal, and China wouldn’t approve it, then I think ultimately they’d approve it because we’d put tariffs on China,” Trump said, adding, “I’m not saying I would, but you certainly could do that.”
He also noted that the tariffs could reach as high as 100%.
Trump further remarked that the U.S. “should be entitled to get half of TikTok” as he signed an order extending the app’s operations in the country for another 75 days.
Stocks futures fall, dollar shaky
The announcement had an immediate but mixed impact on financial markets.
Stock futures remained flat as Trump spoke, but Treasury yields dropped, reflecting investor concerns over potential economic disruptions.
The dollar also weakened, falling nearly 1% against a basket of global currencies.
Additionally, Trump signed an executive order targeting inflation through “emergency price relief” measures.
These policies aim to address costs in housing, healthcare, and other sectors, signaling a domestic policy push alongside the trade measures.
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