Washington: President Donald Trump says he plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10 per cent universal tariff charged on imports from China.
Posting on Truth Social Thursday, Trump said that illicit drugs such as fentanyl are being smuggled into the United States at “unacceptable levels” and that import taxes would force other countries to crackdown 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 per cent Tariff on that date.”
The prospect of escalating tariffs has already thrown the global economy into turmoil — 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 slapped with taxes.
The potential for higher prices and slower growth could create political blowback for Trump, who promised voters in last year’s presidential election that he could quickly lower the inflation rate, which jumped during President Joe Biden’s term.
But Trump also campaigned on imposing broad tariffs and sweeping tariffs, which he plans to launch on April 2 by resetting tariffs to match the taxes that he determines are charged by other countries on American goods.
“The April Second Reciprocal Tariff date will remain in full force and effect,” Trump said as part of his Thursday social media post.
Trump indicated Wednesday that European countries would face a 25 per cent tariff. He also wants separate tariffs on autos, computer chips and pharmaceutical drugs that would be levied in addition to the reciprocal tariffs.
The president already announced that he’s removing the exemptions on his 2018 steel and aluminum tariffs, in addition to planning taxes on copper imports.
The prospect of a broader trade conflict should other nations follow through with their own retaliatory tariffs is already spooking US consumers, potentially undermining Trump’s promise to unleash stronger economic growth.
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, when inflationary pressures began to reverberate across the United States as the economy recovered from the coronavirus pandemic. Average 12-month inflation expectations jumped from 5.2 per cent to 6 per cent 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,” said Stephanie Guichard, a senior economist at the Conference Board. “Most notably, comments on the current administration and its policies dominated the responses.”
The S&P 500 stock index has also fallen over the past month, reversing some of the gains that followed Trump’s November presidential victory, which prompted investors to assume income tax cuts and less regulation would help increase growth.
AP
