Trump Starts 25% Tariffs On Mexican, Canadian Imports

President Donald Trump said that 25% tariffs on imports from Mexico and Canada would take effect, sparking renewed fears of a North American trade war. Analysts warn the move could further drive inflation and slow economic growth, the Associated Press (AP) reported.

Trump’s announcement rattled the U.S. stock market, with the S&P 500 index falling 2% in Monday afternoon trading. I Photo: The White House Flickr

“Tomorrow—tariffs: 25% on Canada and 25% on Mexico. And that’ll start,” Trump told reporters in the Roosevelt Room. “They’re going to have to have a tariff.”

Trump stated that the tariffs aim to pressure the two U.S. neighbors into intensifying their efforts against fentanyl trafficking and curbing illegal immigration. However, he also suggested they are meant to address trade imbalances and encourage more factories to relocate to the U.S.

Historically, the federal government relied on tariffs as a primary revenue source before the 20th century, but later replaced them with the income tax system, which generated more revenue for Washington, D.C., and helped fund the country’s expansion.

Trump’s announcement rattled the U.S. stock market, with the S&P 500 index falling 2% in Monday afternoon trading.

The Trump administration maintains that tariffs are the best strategy to boost U.S. manufacturing and attract foreign investment. Commerce Secretary Howard Lutnick said Monday that chipmaker TSMC expanded its U.S. investments due to the possibility of separate 25% tariffs.

In February, Trump imposed a 10% tariff on Chinese imports, which he announced would double to 20% on Tuesday.

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Despite his push to relocate U.S. corporate manufacturing hubs back to America, many companies instead shifted operations from China to Vietnam and other Southeast Asian countries.

By imposing higher tariffs on those regions as well, Trump risks raising prices for American consumers.