Remember those tariffs President Donald Trump paused for Mexico and Canada last month? They won’t be paused much longer.
Trump announced on his social media site, Truth Social, that he plans not only to impose those tariffs, but he’s going to double the 10-percent universal tariff on imports from China.
In his Truth Social, Trump said illicit drugs such as fentanyl are being smuggled into the United States at “unacceptable levels” and that import taxes would force other countries to crack down on the trafficking.
“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” the Republican president wrote. “China will likewise be charged an additional 10% Tariff on that date.”
The prospect of escalating tariffs has already thrown the global economy into turmoil, the Associated Press reported, with consumers expressing fears about inflation worsening and the auto sector possibly suffering if America’s two largest trading partners in Canada and Mexico are hit with taxes.
But Trump has also at times postured on the issue of tariffs, as he did before pausing them for Mexico and Canada.
Trump intends to put 25% tariffs on imports from Mexico and Canada, with a lower 10% tax on Canadian energy products such as oil and electricity, the AP reported. The move, ostensibly about drug trafficking and immigration, led Mexico and Canada to respond by emphasizing their existing efforts to address these issues. Canada created a fentanyl czar, and Mexico sent 10,000 members of its National Guard to its border with the United States.
Mexican President Claudia Sheinbaum said Thursday that she hoped to speak with Trump after the Cabinet-level meetings occurring in Washington this week. Mexico’s Foreign Affairs Secretary Juan Ramón de la Fuente was scheduled to meet with Secretary of State Marco Rubio on Thursday afternoon, according to AP.
The 25% tariffs on Mexico and Canada would amount to a total tax increase on the U.S. public of somewhere between $120 billion to $225 billion annually, according to Jacob Jensen, a trade policy analyst at the American Action Forum, a center-right think tank. The additional China tariffs could cost consumers up to $25 billion, AP reported.
The potential for trade conflicts isn’t doing much for consumer confidence. The Conference Board reported on Tuesday that its consumer confidence index had dropped 7 points to a reading of 98.3. It was the largest monthly decline since August 2021. Average 12-month inflation expectations jumped from 5.2% to 6% in February, the Conference Board noted.
“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,” Stephanie Guichard, a senior economist at the Conference Board, told the AP. “Most notably, comments on the current administration and its policies dominated the responses.”
