On Monday, President Trump announced that his tariffs on Canada and Mexico will go into effect next month. This decision ends a monthlong moratorium on the planned import levies, which have the ability to hinder economic development and exacerbate inflation.
Speaking at a joint press conference with his French counterpart, Emmanuel Macron, President Trump said that the tariff process was progressing at a quick pace and that the United States was meeting its deadlines.
While Trump was addressing a direct question on tariffs on the US’s two biggest trade partners, he also made it clear that his planned “reciprocal” penalties will go into effect in April.
In his statement, Trump assured the public that the tariffs would go as planned.
The president has asserted that the unjust import duties imposed by foreign nations have decimated American industry and employment opportunities. Already, companies and consumers are worried about a downturn in the economy and soaring inflation due to his nearly continual threats of tariffs. However, Trump asserts that, in the long run, import fees would bring in enough money to lower the national debt and even create some new employment.
“Our country will be extremely liquid and rich again,” Trump declared.
Late Monday, during an appearance on Fox News’ “Special Report,” Macron expressed his confidence that he had persuaded Trump to prevent a trade war. He acknowledged the problem of confronting a long-standing partner like Europe while also attempting to challenge China’s industrial power through tariffs.
Forget about a trade war, according to Marcon. “All of us need to be prosperous more often.”
Manufacturers, including car makers that rely on steel and aluminum—which Trump is already tariffing at 25% separately—and consumers, retailers, and manufacturers might bear the brunt of the penalties, according to most economists.
On Monday, meanwhile, Mexican President Claudia Sheinbaum gave the impression that her administration was certain that the United States and Mexico would achieve an agreement before Trump’s deadline.
“We would need to be reaching important agreements this Friday,” Sheinbaum told reporters Monday morning before Trump’s statements. I think we’re in a position to finish this deal because there is communication on all the problems.
She stated her intention to seek another opportunity to talk with Trump directly if needed. According to Sheinbaum, during high-level talks between the two countries, Mexico suggested that the United States examine drug use and distribution in Mexico as well, instead of focusing just on manufacturing in Mexico.
Fears about tariffs and inflation worsening contributed to a 10% drop in the most recent consumer mood index from the University of Michigan, while companies like Walmart have issued warnings about uncertainty. The idea that Trump might bring inflation down from its four-decade high following the coronavirus epidemic under President Joe Biden’s tenure in office was a major factor in his victory in the 2024 presidential election.
However, Trump has continued to threaten tariffs and has maintained his calls even though Macron, who is standing at his side, had previously indicated that trade discussions had yielded some consensus.
Speaking at the press conference, Macron expressed his desire to “make a sincere commitment towards a fair competition where we have smooth trade and more investments,” as translated from his French remarks.
After stating that their teams would continue to meet to develop their ideas, Macron reiterated that the goal is for both the United States and Europe to succeed.
Businesses, investors, and the general public are still trying to figure out if Trump is just using tariff threats as a bargaining chip or if he really supports the tax increases to counteract his proposed income tax cuts.
The Trump administration has met with Mexican and Canadian officials, but on Monday, the president suggested that he would lift the tariff moratorium that had been in place since February, which had been supposed to last 30 days. Imports from Mexico and most of Canada will be subject to a 25% tariff under Trump’s plan, but energy items like Canadian power and oil will be subject to a lesser 10% levy.
As part of his efforts to deter illegal immigration and combat drug smuggling, including fentanyl, President Trump has threatened to impose taxes on items imported from Canada and Mexico. Canada has appointed a czar to deal with the fentanyl problem and win over Trump, despite the fact that the country does not produce a large amount of the drug. As an additional safeguard, Mexico has sent 10,000 National Guardsmen to the border with the US.
To bring American tariffs in line with those of other countries, Trump intends to levy new taxes. Starting in April, tariffs might be greater than what other nations charge due to factors like as subsidies, regulatory hurdles, and the value added tax, which is similar to a sales tax widespread in Europe.
A wider trade war that hinders growth is possible if Europe, Canada, and Mexico all implement retaliatory tariffs. The Yale University Budget Lab projected in February that annual earnings in the United States might be impacted by an estimated $1,170 to $1,245 due to tariffs imposed by Canada and Mexico.
