Trump says 25% tariffs on Mexico, Canada imports to start on Tuesday
US president says ‘no room left’ for a deal as his administration goes ahead with levies against Canada and Mexico
US President Donald Trump said Monday that 25 per cent taxes on imports from Mexico and Canada would start Tuesday, sparking renewed fears of a North American trade war that already showed signs of pushing up inflation and hindering growth.
“Tomorrow – tariffs 25 per cent on Canada and 25 per cent on Mexico. And that’ll start,” Trump told reporters in the Roosevelt Room. “They’re going to have to have a tariff.”
Trump has said the tariffs are to force the two US neighbours to step up their fight against fentanyl trafficking and stop illegal immigration. But Trump has also indicated that he wants to eliminate the Americas’ trade imbalances as well and push more factories to relocate in the United States.
His comments quickly rattled the US stock market, with the S&P 500 index down 2 per cent in Monday afternoon trading. It was a sign of the political and economic risks that Trump felt compelled to take, given the possibility of higher inflation and the possible demise of a decades-long trade partnership with Mexico and Canada as the tariffs would go into effect at 12.01am Tuesday (1.01pm Hong Kong time).
Yet the Trump administration remained confident that tariffs were the best choice to boost US manufacturing and attract foreign investment. Commerce Secretary Howard Lutnick said Monday that the computer chipmaker TSMC had expanded its investment in the United States because of the possibility of separate 25 per cent tariffs.