On Saturday, the Trump administration plans to apply tariffs on imports from Canada, Mexico, and China, putting pressure on three key US trade partners while risking price rises for vital staples such as fuel and food.
The proposal is intended to impose a 25% duty on all imports from Canada and Mexico, as well as a 10% levy on Chinese goods.
Hours before the duties were supposed to go into effect, officials in Canada and Mexico promised to retaliate, raising the prospect of a trade war.
Tariffs of this kind are anticipated to raise costs paid by US buyers, since importers often pass on a portion of the cost of additional taxes to consumers, analysts have told HeadlinesForever.
The regulation might hike costs for a variety of things, including avocados, tequila, and car components.
The pricing impact is unknown, however, because enterprises in the supply chain may choose to bear some or all of the tax cost, according to some analysts.
Speaking at the White House on Friday, U.S. Press Secretary Karoline Leavitt stated that the tariffs target the three nations for hosting the production and transportation of illicit narcotics that end up in the United States.
“Canada, Mexico and China have all enabled illegal drugs to pour into America,” Leavitt stated on Monday.
The stance was shared by President Donald Trump, who recommended such levies in a post on Truth Social weeks after winning the November election.
“These are promises made and promises kept by the president,” according to Leavitt.
Less than two hours after Leavitt spoke to reporters, Canadian President Justin Trudeau stated in a post on X that any tariffs would prompt a “forceful and immediate response.”
Earlier in the day, Mexican President Claudia Sheinbaum questioned the probability of tariffs. “We don’t believe that it will happen and if it does, we have our plan,” Sheinbaum replied.
According to the U.S. Energy Information Administration, Mexico and Canada account for 70% of crude oil imports to the United States, which are a critical component of the country’s gasoline supply.
Timothy Fitzgerald, a professor of business economics at the University of Tennessee who analyzes the petroleum sector, recently told HeadlinesForever that the tariffs may hike gasoline costs by much to 70 cents per gallon for some drivers.
Trump stated in the Oval Office earlier this week that the tariffs may include an exemption for oil. Such a measure might reduce the possibility of a gasoline price increase, but the inclusion of the exception was uncertain a day before the tariffs were supposed to go into effect.
When questioned on Friday about a prospective oil exception, Leavitt declined to comment explicitly. “I don’t have an update,” Leavitt said. “Those tariffs will be for public consumption in about 24 hours.”
Jason Miller, a supply-chain management professor at Michigan State University, told HeadlinesForever that the planned tariffs might hike the prices of a variety of fresh fruits and vegetables, including tomatoes, cucumbers, bell peppers, jalapenos, limes, and mangos.
It would be difficult for the United States to replace those commodities with domestic manufacture or an alternate source, implying that costs would rise dramatically if the tariffs were implemented, he noted.
The auto sector also has strong linkages to Canada and Mexico, which makes tariffs a danger to car and auto part pricing, according to analysts.
Inflation has dropped substantially since reaching a high of more than 9% in June 2022, but price rises have crept back in recent months, maintaining inflation about a percentage point over the Fed’s goal rate of 2%.
Speaking on Friday, Leavitt praised Trump’s earlier accomplishments in keeping inflation under control.
“Americans who are concerned about rising costs should consider what President Trump did throughout his first term. He successfully introduced tariffs, and the average inflation rate during Trump’s first presidency was 1.9%.