President Donald Trump’s blanket 25% tariffs on Mexico and Canada took effect on March 4th, an extraordinary action aimed at bringing America’s top trading partners to heel.
But it threatens to weaken the North American economy, including that of the United States, at a time of significant stress for inflation-weary consumers. Trump also doubled the tariff on all Chinese imports to 20% from 10%. Those duties sit atop existing tariffs on hundreds of billions in Chinese goods. China and Canada immediately retaliated with tariffs on American goods, threatening to ignite a damaging trade war. The Trump administration said the tariffs were necessary to stem the flow of fentanyl into the United States.
But the tariffs come at a time when inflation remains stubbornly high. Americans, and the US economy as a whole, are on shakier ground, as evidenced by recent data.
Trump’s tariffs threaten to raise the prices Americans pay for a wide array of goods that are imported from the three nations, which collectively shipped $1.4 trillion worth of goods to the US last year, according to Commerce Department data. That accounts for more than 40% of the value of all goods the US imported last year.
The only goods that won’t face a 25% tariff from Canada are energy-related items such as crude oil, one of the top goods the US imports from there.