U.S. President Donald Trump looks on as he signs an executive order in the Oval Office at the White House in Washington, U.S., Jan. 31, 2025.
Carlos Barria | Reuters
U.S. President Donald Trump is pushing ahead with long-threatened import tariffs on goods from Canada, Mexico and China.
On Saturday, Trump signed an order imposing 25% tariffs on imports from Mexico and Canada, as well as a 10% duty on China. Energy resources from Canada will receive a 10% tariff.
Together, the U.S. does about $1.6 trillion in annual business with the three countries. Trump is seeking to use the tariffs as both bargaining chips and methods to effect foreign policy changes, specifically the immigration and drug trade issues.
“We’ve got the Super Bowl coming up, and eerily, the amount of people that fit in the [New Orleans] Superdome are almost exactly equal to the number of people dying every year here in America from fentanyl, and that comes from China and Mexico,” Peter Navarro, senior adviser to the president for trade and manufacturing, told CNBC in an interview Friday. “This is why we have these kind of discussions.”
The tariffs are expected to take effect on or after 12:01 a.m. ET on Tuesday. There is no official metric on when the tariffs would be lifted. Also, under the new order, the tariffs would escalate if the countries retaliate in any way against the U.S.
Tariffs are duties imposed on foreign goods that are paid by U.S. importers. Economists broadly oppose tariffs, arguing that they result in higher prices for domestic consumers.
But Trump has long promoted tariffs as a way to negotiate better deals with U.S. trading partners, protect domestic industries from foreign competition and gain revenue.
In the Oval Office on Friday, Trump said his decision to slap tariffs on goods from Canada, Mexico and China is “pure economic.”
However, economists worry they could reignite inflation at a time when it appears price pressures are beginning to abate. The Commerce Department reported Friday that an inflation reading closely watched by the Federal Reserve rose to 2.6% in December, but the details in the report appeared more positive. Fed officials have said they are monitoring the impact of fiscal policy.
Trump has vowed to impose new or additional tariffs on numerous other categories of foreign goods, including microchips, oil and gas, steel, aluminum, copper and pharmaceuticals, including “all forms of medicine.” He has also said he will “absolutely” slap tariffs on the European Union.
Economists worry that the tariffs could reignite inflation at a time when it appears price pressures are beginning to abate.
“It will be very important to have a better sense of the actual policies and how they will be implemented, in addition to greater confidence about how the economy will respond,” Fed Governor Michelle Bowman said.
Speaking to CNBC on Friday morning, Chicago Fed President Austan Goolsbee said the key will be whether the tariffs are one-off events or lead to retaliation.
On Saturday, following Trump’s imposition of tariffs on Mexico, Canada, and China, House Committee on Agriculture Chairman Glenn “GT” Thompson, R-Pa., issued the following statement: “President Trump’s tariff policy has been an effective tool in leveling the global playing field and ensuring fair trade for American producers. Look no further than Colombia’s about-face on accepting repatriated criminal migrants at the mere threat of tariffs.”
He added: “I look forward to working alongside of President Trump to support our hardworking producers and to make agriculture great again.”
—CNBC’s Kevin Breuninger and Jeff Cox contributed reporting.
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