President Trump’s threatened tariffs against Mexico, Canada and China went into effect Saturday evening.
By slapping a 25% wholesale tariff on both Mexico and Canada at once, Trump is taking a more aggressive strategy against the nation’s neighbors than he did in his first administration. At that time, he took a more targeted approach to specific industries, like steel and aluminum. China, at the moment, is only being levied with a 10% tariff.
This time around, the tariffs seem to apply to most categories, although oil and gas appear to be exempt for now. Trump told reporters Friday that he was already structuring his next round of tariffs.
“We’re going to put tariffs on oil and gas. That’ll happen fairly soon. Think around the 18th of February and we’re going to put a lot of tariffs on steel,” Trump teased from the White House on Friday.
In announcing the tariffs Saturday the White House added there was a « retaliation clause » added to the measures.
« So that if any country chooses to retaliate in any way, the signal will be to take further action with respect to likely increased tariffs,” the White House said.
Tariffs on oil would be most impactful on Canada, which sends about 97% of all its crude oil exports to the United States, according to the Canada Energy Regulator. Trump also suggested Friday he would tariff China’s microchips in his next round of tariffs, bolstering trade barriers on technology critical to the race on artificial intelligence.
Gregory Daco, chief economist at Ernst & Young, said imposing tariffs “on large trading partners would have severe economic consequences” for the U.S., Mexico and Canada, “and could lead to an environment that is both a higher inflation environment and also a lower growth environment because of the importance of the trade with both of these economies.”
He added: “We tend to think a lot about merchandise goods as being automotive goods, furniture goods and these types of heavy equipment goods. But we should not forget that we also do a lot of trade on the agricultural front. So we could see upward pressure for meat prices, upward pressure for dairy prices. Those are the types of categories that directly hit consumers wallets.”
After meeting with chipmaker Nvidia CEO Jensen Huang, Trump said, “Eventually we’re going to put tariffs on chips.” He provided little detail beyond that.
The U.S. already enforces export controls that restrict the most high-power microchips to China, as American companies like OpenAI try to stave off AI challenges from Chinese apps like DeepSeek.
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