Financial Insights That Matter
President Donald Trump moved forward Saturday with his plans for tariffs on Canada, Mexico and China, ending a guessing game about how aggressively he would move to penalize America’s three largest trading partners.
The tariffs — as Trump has promised since after his election win — will be 25% duties on Canada and Mexico and 10% on China over issues of fentanyl and illegal migration.
The duties on all three countries will be fully in force by Tuesday, Feb. 4, according to the orders signed by Trump Saturday afternoon in Florida.
But tariffs on crucial energy imports from Canada will be lower with 10% duties on those products. The carveout was an acknowledgment of US and Canadian energy interdependence.
Trump said the drug and migration issues constituted a national emergency and moved forward on the duties using authority in the 1977 International Emergency Economic Powers Act (IEEPA).
“We need to protect Americans, and it is my duty as President to ensure the safety of all,” Trump added in a Truth Social post. He then posted a video clip reiterating his view that tariff is his favorite word.
Canada, Mexico, and China quickly responded and are also set to roll out retaliatory measures of their own across a range of goods.
Canada acted first with Prime Minister Justin Trudeau announcing a plan for 25% retaliatory tariffs of their own that will beging to be in effect on Tuesday.
Other Canadian politicians rolled out their own measures including one effort to remove US made alcohol brands made in Republican-led states from Canadian retail stores.
“We did not want this, but Canada is prepared,” said Trudeau.
Mexican President Claudia Sheinbaum added her own post that called Trump’s charges against her country “slander” saying the issues of illegal drugs and migration would not be solved by tariffs.
Trump’s executive orders also include provisions that could allow the US tariffs to go even higher if the duties kick off a trade war.
A clause states that the US may respond to any retaliatory measures and “the President may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.”
The economic effects of the duties are likely to be significant on all economies involved, especially if they are kept in place for an extended duration.
Yale’s Budget Lab has offered an estimate of the duties, suggesting that these new tariffs could translate in a decline of about $1,250 in annual purchasing power for a middle class family.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.