Trump to impose 25% tariffs on Mexico, Canada; increases China duties

Trump announced 25% tariffs on Mexico and Canada, set for March 4, citing fentanyl smuggling concerns. He also raised tariffs on Chinese imports to 20%. While talks with North American officials continue, the new trade measures could disrupt economic ties and escalate tensions with China.

President Donald Trump said Thursday that his proposed 25% tariffs on Mexican and Canadian imports will take effect March 4, along with an additional 10% duty on Chinese goods. He cited continued fentanyl smuggling into the United States as the reason for the measures.

Speaking from the Oval Office, Trump said the tariff on Chinese imports would be in addition to the 10% duty imposed on Feb. 4 over the fentanyl crisis, bringing the total tariff to 20%.

Trump first announced the tariffs on his Truth Social account, saying fentanyl shipments into the U.S. remained at “very high and unacceptable levels.”

When asked whether Canada and Mexico had made enough progress in curbing fentanyl trafficking, Trump said, “I don’t see that at all. No, not on drugs.”

Foreign aid freeze, border control

The White House said discussions with Canada, Mexico, and China are ongoing. However, Trump’s freeze on U.S. foreign aid has slowed efforts to combat fentanyl smuggling.

The freeze delayed U.S. training programs for Mexican authorities and stalled the expansion of a United Nations initiative aimed at improving cargo screening in Mexican ports, according to Reuters.

Meanwhile, U.S. Customs and Border Protection has postponed a ban on duty-free, low-value package shipments from China, Canada, and Mexico until stricter screening measures are in place.

Tariff tactics, trade risks

The tariffs mirror Trump’s first-term trade war strategy with China, where he steadily increased duties until Beijing engaged in negotiations. So far, Chinese President Xi Jinping has responded with a limited 10% retaliatory tariff on U.S. energy and farm equipment.

If tariffs on Chinese imports reach 20% across the board, Beijing could impose stronger countermeasures. The U.S. imported $439 billion in goods from China in 2024, many of which already faced duties of up to 25% from Trump’s previous trade actions.

Economists warn that further tariff hikes could destabilize both economies. China is struggling with a property crisis and weak domestic demand, while the U.S. continues to battle inflation and high interest rates.

In a letter to U.S. Trade Representative Jamieson Greer, China urged “equal dialogue and consultation” to resolve trade disputes.

U.S., Mexico, and Canada trade talks

In an effort to avoid the tariffs, Canadian and Mexican officials met with U.S. counterparts in Washington on Thursday and Friday. Mexican Economy Minister Marcelo Ebrard was set to meet Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer to discuss possible compromises.

Mexican officials have suggested countermeasures, including expanding tariffs on cheap Chinese imports.

In Canada, Public Safety Minister David McGuinty defended the country’s anti-smuggling efforts, saying, “The evidence is irrefutable—progress is being made.”

The Canada Border Services Agency announced a new initiative to crack down on illegal contraband, focusing on fentanyl and other synthetic drugs.

Despite diplomatic efforts, Trump said the tariffs will move forward as planned on March 4, unless there is significant progress.

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