President Donald Trump said on Thursday that he plans to impose a 25% tariff on Canada and Mexico after delaying plans to implement them earlier this month.
In a post on Truth Social, President Trump claimed that drugs were coming across the border "from Mexico and Canada at very high and unacceptable levels." The tariffs will go into effect March 4, President Trump says.
"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," President Trump wrote.
Trump had paused tariffs on both nations after their leaders said they would bolster border security and assist the U.S. in stopping the flow of illegal drugs.
President Trump also said that an additional 10% tariff will be imposed on goods from China. Additionally, the president said a planned 25% tariff on automobile, semiconductor, and pharmaceutical imports will begin on April 2.
Tariffs are fees charged to companies for importing their goods from another country. Many economists believe that most companies will pass the cost of a tariff to the consumer instead of absorbing the fee.
According to research released in October 2024 by Georgia State University, Arizona State University, and Colorado State University, tariffs might not only cause an increase in prices for consumers, but they can also disrupt supply chains.
China, Mexico and Canada are the United States' three largest trading partners, so their potential impacts could be widely felt if President Trump moves forward with them.
According to the Observatory of Economic Complexity, Mexico exports over $421 billion in goods to the U.S. annually. Mexico’s next largest global trading partner is Canada, as it exports over $22 billion in goods there.
Mexico exports $36.8 billion in computers to the U.S., while exporting $34.1 billion in cars. The U.S. also gets about $31.8 billion in car parts from Mexico.
RELATED STORY | Trump threatens to impose sweeping new tariffs on Mexico, Canada and China
The U.S. exports $294 billion to Mexico annually, the OEC reports.
Canada exports $438 billion in goods to the U.S. yearly. Its next largest trade partner is China, at $25.4 billion. About 36% of what the U.S. imports from Canada is oil and gas products. The U.S. also takes in about $27 billion a year in cars from Canada.
Motor vehicle parts, raw metals and wood are also major imports the U.S. gets from Canada.
The U.S. sends about $308 billion in exports to Canada.
