In a move that could reverberate through global markets, President Donald Trump announced plans on Friday to impose new tariffs on the United States’ three largest trading partners—Canada, Mexico, and China—beginning this weekend. The tariffs, which are slated to take effect on Saturday, target a range of imported goods and come amid rising domestic pressure to address border security and the illegal flow of fentanyl into the country.
“We’re taking decisive action,” President Trump declared from the Oval Office, warning that his administration would soon introduce tariffs of 25 percent on imports from both Canada and Mexico. He linked the imposition of these duties to what he described as the failure of these neighboring countries to effectively stem the tide of illegal migrants and the influx of fentanyl that has been claimed to be contributing to a growing public health crisis. Additionally, the president announced plans to apply a 10 percent tariff on Chinese goods on the same day, citing similar concerns over the drug trade.
White House spokeswoman Karoline Leavitt confirmed the impending tariffs during a press briefing on Friday. “Both Canada and Mexico have allowed an unprecedented invasion of illegal fentanyl that is killing American citizens,” she said. Leavitt emphasized that the tariffs were set to be implemented as scheduled on February 1, and she dismissed warnings from some quarters that the new measures might ignite a full-blown trade war.
Beyond the immediate measures, President Trump hinted at further tariffs in the near future. “Eventually we’re going to put tariffs on chips, we’re going to put tariffs on oil and gas,” he stated, without specifying which nations might face these additional charges. The president also mentioned the potential for higher duties on steel, aluminum, and eventually copper imports, while asserting that the European Union, which he accused of “treating us so terribly,” would also be in the crosshairs in future trade actions.
The announcement has drawn swift responses from international leaders. Canadian Prime Minister Justin Trudeau vowed an “immediate response” should the tariffs take effect, and Mexican President Claudia Sheinbaum confirmed that her administration was closely monitoring the situation and in regular contact with Washington officials.
Economic analysts, however, warned that the tariffs could have far-reaching consequences. According to a report from the Tax Foundation, the new duties on Canada, Mexico, and China could reduce overall economic output by approximately 0.4 percent, effectively acting as an “average tax increase of more than $830 per US household in 2025.” Other experts from Oxford Economics cautioned that the broad application of these tariffs might push Canada and Mexico into recession while also triggering a shallow downturn in the United States.
One particularly sensitive area is the oil market. Nearly 60 percent of U.S. crude oil imports come from Canada, and President Trump acknowledged that tariffs on Canadian crude oil might need to be adjusted. “I’m probably going to reduce the tariff a little bit on that,” he said, indicating a possible reduction to around 10 percent to ease pressure on U.S. refiners who rely heavily on Canadian heavy oil.
Analysts also see these tariff measures as a potential bargaining chip to fast-track the renegotiation of the North American trade deal—USMCA—between the United States, Mexico, and Canada. Yet, for industries and consumers alike, the immediate impact could be significant disruptions to supply chains and increased production costs, particularly in sectors such as automotive, manufacturing, and energy.
On the international stage, Beijing has dismissed allegations linking it to the fentanyl crisis, and Canadian officials have countered claims by noting that less than one percent of undocumented migrants and illegal drugs enter the U.S. through its northern border.
While some experts at financial services firms expect incremental increases in tariffs on Chinese imports, the long-term strategy remains uncertain. “Our sense is that Trump will vacillate between carrots and sticks with China, with the ultimate goal being some sort of grand bargain before the end of his term,” said Isaac Boltansky of BTIG.
As the new tariffs loom on the horizon, businesses and policymakers alike brace for the ripple effects of a potentially deepening trade confrontation—one that could reshape economic relationships across North America and beyond.
