WASHINGTON (AP) — President Donald Trump announced on Monday that his tariffs on Canada and Mexico will officially take effect next month, putting an end to a month-long delay on the planned import taxes. These tariffs have the potential to impact economic growth and exacerbate inflation concerns.
“We are proceeding with the tariffs as scheduled, and progress is being made rapidly,” stated the U.S. president during a news conference at the White House alongside French President Emmanuel Macron. While responding to a question regarding taxes on America’s top trading partners, Trump emphasized that his planned “reciprocal” tariffs are set to commence in April.
“The tariffs are moving forward as planned and will be implemented on time,” Trump affirmed.
Trump has consistently argued that other nations impose unjust import taxes that harm domestic manufacturing and employment opportunities. The constant threat of tariffs has raised apprehensions among businesses and consumers about a potential economic slowdown and increased inflation. However, Trump believes that these import taxes will ultimately generate revenue to reduce the federal deficit and create new job opportunities.
“Our nation will thrive and prosper once more,” Trump expressed.
In a later interview with Fox News, Macron shared his hopes of persuading Trump to avoid a trade war, acknowledging the challenges of confronting traditional allies like Europe while simultaneously using tariffs to challenge China’s industrial dominance.
“We must steer clear of a trade war. Our focus should be on fostering mutual prosperity,” Macron stated.
Many economists predict that the burden of these tariffs will largely fall on consumers, retailers, and manufacturers, especially those in the automotive industry that rely on global sourcing of raw materials like steel and aluminum, which are already subject to separate tariffs of 25%.
Despite uncertainties raised by companies such as Walmart and a recent significant drop in the University of Michigan’s consumer sentiment index due to tariff and inflation concerns, Mexican President Claudia Sheinbaum expressed confidence that agreements can be reached with the U.S. government before the impending deadline.
“We aim to finalize crucial agreements by this Friday,” Sheinbaum commented before Trump’s remarks, emphasizing ongoing communication and negotiation efforts.
In the midst of high-level dialogues, Mexico has urged the U.S. to address drug distribution and consumption within its own borders, rather than solely focusing on production in Mexico, Sheinbaum pointed out.
While some voters supported Trump in the 2024 presidential election with hopes of curbing inflation that surged during President Joe Biden’s term, Trump has persistently advocated for tariffs despite Macron’s assertion of common ground in trade discussions.
“Our commitment is to promote fair competition, enable smooth trade, and encourage increased investments for the prosperity of both the U.S. and Europe,” Macron declared during the news conference.
Indicating that additional discussions would be conducted by their respective teams to elaborate on their proposals, investors, businesses, and the general public are still grappling with the question of whether Trump is using tariffs as a bargaining tool or genuinely supports tax increases to counterbalance his planned cuts in income tax. Despite engaging in talks with Canadian and Mexican officials, the U.S. president announced on Monday his decision to lift the 30-day postponement of tariffs that were initially scheduled to be implemented in February. Trump intends to impose a 25% tax on imports from Mexico and most Canadian goods, with certain energy products like Canadian oil and electricity subjected to a lower 10% tariff.
The rationale behind Trump imposing tariffs on Canadian and Mexican products is to compel them to take stronger actions against illegal immigration and the trafficking of drugs like fentanyl. Although only a small amount of fentanyl originates from Canada, the country has announced the appointment of a czar to address the issue and satisfy Trump’s demands in addition to existing measures. Mexico, on the other hand, has deployed 10,000 members of its National Guard to the border with the U.S., supplementing existing measures.
Furthermore, Trump plans to introduce new tariffs aligned with the rates set by other nations. Starting as early as April, these tariffs could surpass those of other countries due to the inclusion of subsidies, regulatory obstacles, and the value-added tax—similar to a sales tax commonly seen in Europe—in the calculations.
The prospect of retaliatory tariffs being imposed by Canada, Mexico, and Europe raises concerns about the potential for a broader trade dispute that could undermine economic growth. In February, the Yale University Budget Lab estimated that the tariffs from Canada and Mexico alone could reduce average U.S. incomes by $1,170 to $1,245 per year.
Reporting from Mexico City contributed by Sanchez.
