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donald trump The president-elect plans to issue an executive order imposing a 25% tariff on imports from Canada and Mexico on his first day in office, he posted on Truth Social on Monday.
These new threats also include the promise of an additional 10% tariff on Chinese goods and build on Trump’s campaign promise to impose aggressive tariffs to entice companies to set up production hubs in the United States. The Biden administration confirmed an increase in tariffs on some Chinese products last September.
Ahead of the November 5 presidential election, President Trump has consistently announced that he will increase tariffs on Chinese products by 60% and impose tariffs of up to 20% on imported goods.
The move could send the country back down the path of the trade war waged during Trump’s first presidency, when he imposed tariffs on goods from several countries, including Canada, Mexico and China.
Trump’s presidency also puts the U.S.-Mexico-Canada Agreement in jeopardy. A 2018 trade deal halted tensions between the North American countries, but the agreement is scheduled to be reviewed in 2026.
Alberto Villareal, managing director of business consulting firm Nepanoa, wrote on LinkedIn on Monday: “If President Trump goes ahead with immediate and unilateral tariffs, it could increase tensions over the USMCA and make it a de facto nuclear weapon.” “There is,” he wrote. In response, Mexico and Canada may retaliate by imposing tariffs on U.S. exports before reviewing the agreement, he said.
According to Villareal, retaliatory tariffs from Mexico and Canada will affect products such as agricultural products and chemicals.
Higher tariffs could also hurt U.S. retailers, manufacturers, and consumers.
Even before President Trump’s announcement Monday, the new tariffs were expected to increase inflation and cost American shoppers up to $78 billion a year in spending power, according to the National Retail Federation. Sanjay Patnaik, a senior fellow at the Brookings Institution, said higher tariffs would also be “devastating” for manufacturers that import foreign components.
Moreover, tariffs could force companies to build stand-alone supply chains to export to the U.S., said Mary Lovely, an Anthony M. Solomon senior fellow at the Peterson Institute for International Economics. said during a press briefing with the Port of Los Angeles on November 20.
With less than two months left in President Trump’s term, companies are already preparing for tariff increases. Some companies, such as Williams-Sonoma, Steve Madden, and Ralph Lauren, are actively reducing sourcing from China, while others, such as Honda and Traeger, are changing their production strategies..
