Donald Trump said the tariffs on Mexico, Canada and China will remain in place until the national emergency over fentanyl and illegal immigration in the United States is over.
US officials told reporters that energy products from Canada will be taxed at 10% while energy imports from Mexico will be subject to a 25% tariff.
The White House announcement on the tariffs said the tariffs would remain in place “until the crisis abates,” but did not provide details on what actions Mexico, Canada and China would need to take to get the tariffs suspended.
Under the order signed by Trump, tariffs on goods from Mexico, Canada, and China will take effect at 12:01 a.m. EST on February 4. However, imports that are loaded onto ships or transported to their final transit point before entering the United States before 12:01 a.m. on February 1 will be exempt from the tariffs.
President Donald Trump declared a national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to create a solid legal basis for imposing tariffs, giving the president full authority to address the crisis.
White House officials stressed that there would be no exceptions to the tariffs. In addition, in Canada’s case, the US “de minimis” exemption for small shipments under $800 would be eliminated.
President Trump has set a February 1 deadline to push for strong action to stop the flow of fentanyl and precursor chemicals from China into the United States through Mexico and Canada, as well as to stop illegal immigrants from entering the United States.
A model assessing the economic impact of President Trump's tariff plan from EY chief economist Greg Daco said the move would reduce US growth by 1.5% this year, push Canada and Mexico into recession and lead to "stagflation" at home.
The volatility was evident on January 31, when the Mexican peso and the Canadian dollar both fell sharply after President Trump announced that he would follow through on his tariff pledge. In the US, stock prices fell and Treasury yields rose.
