President Donald Trump plans to impose tariffs on Canada, Mexico, and China, citing the smuggling of illicit drugs such as fentanyl into the United States at “unacceptable levels.”
The tariff implementation is scheduled to begin on March 4th, with the aim of pressuring other countries to address the issue of drug trafficking into the U.S.
The big picture: The announcement of escalating tariffs has led to global economic turmoil, with concerns about potential inflation and the impact on the auto sector, particularly with America’s largest trading partners, Canada and Mexico, facing potential taxes.
- Trump’s intentions include imposing 25% tariffs on imports from Mexico and Canada, with a lower 10% tax on Canadian energy products. Canada’s response involves the establishment of a fentanyl czar and Mexico’s deployment of 10,000 National Guard members to its border with the U.S.
- The President also plans to double the 10% tariff on China due to its involvement in the manufacturing of chemicals used in the production of fentanyl.
State of play: The potential economic implications and the possibility of higher prices and slower growth may create political challenges for Trump, particularly regarding his promises to lower the inflation rate and deliver robust economic growth.
- Trump’s announcement also includes plans to reset tariffs on April 2nd to match taxes imposed by other countries on American goods as part of his broader tariff strategy.
- Trump has already announced the removal of exemptions on 2018 steel and aluminum tariffs and is planning taxes on copper imports.
