Trump says 25% tariffs on Canada and Mexico 'will go forward' in March after month-long delay

25 February 2025, 00:33 | Updated: 25 February 2025, 00:35

Donald Trump said the US will start to impose 25% tariffs on imports from Canada and Mexico next month, after the countries struck deals with Trump and delayed them for a month.

The tariffs were paused for a month after Trump struck separate last-minute deals with his Mexican and Canadian counterparts.

Before those deals were struck, both Canada and Mexico had promised to impose retaliatory tariffs, setting up a trade war which could dramatically impact on the US economy.

"We're on time with the tariffs, and it seems like that's moving along very rapidly," the US president said at a White House news conference with French President Emmanuel Macron.

While Trump was answering a question about the taxes to be charged on America's two largest trading partners, he also stressed more broadly that his intended "reciprocal" tariffs were on schedule to begin as soon as April.

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"The tariffs are going forward on time, on schedule," Trump said.

The US president has claimed that other countries charge unfair import taxes that have come at the expense of domestic manufacturing and jobs.

His near constant threats of tariffs have already raised concerns among businesses and consumers about an economic slowdown and accelerating inflation.

But Trump claims that the import taxes would ultimately generate revenues to reduce the federal budget deficit and new jobs for workers.

"Our country will be extremely liquid and rich again," Trump said.

He has already imposed a 10% tax on China, to which Beijing responded with a retaliatory tariff which experts have warned could rapidly escalate into a trade war between the superpowers.

The US is the largest importer of goods in the world, with Mexico, China and Canada as its top three suppliers, according to the most recent Census data. The countries also represent huge export markets for the US.

This is why the tariffs are predicted to have dramatic effects on the US economy and set up a trade war between the three countries, who are currently protected by the US-Mexico-Canada free trade agreement.

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“We’ll be announcing the tariffs on Canada and Mexico for a number of reasons,” Trump told reporters as he signed executive orders and answered questions about a deadly airplane collision in Washington D.C. last month.

“Number one is the people that have poured into our country so horribly and so much. Number two are the drugs, fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits,” he said.

The tariffs were postponed after both countries announced plans to strengthen their policies on controlling their shared borders with the US.

Trump insists tariffs are paid by the country they are imposed on, but this is not true - tariffs are paid by American companies that import goods and services from those countries.

The companies then usually pass their higher costs on to their consumers, which raises prices for the average American citizen.

However, they might impact Canada and Mexico too, as their products become more expensive to sell in the American market.

But Trump showed no concern that import taxes on the United States' trading partners would have a negative impact on the US economy, despite the risk shown in many economic analyses of higher prices.

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"We don't need the products that they have," he said. "We have all the oil you need. We have all the trees you need, meaning the lumber."

The president also said that China would pay tariffs for its exporting of the chemicals used to make fentanyl.

He has previously stated a 10% tariff that would be on top of other import taxes charged on products from China.

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Trump said Beijing has failed to prevent fentanyl and chemicals associated with the deadly drug from entering the US, which he said they promised him.

“With China, I’m also thinking about something because they’re sending fentanyl into our country, and because of that, they’re causing us hundreds of thousands of deaths,” Trump said Thursday.

“So China is going to end up paying a tariff also for that, and we’re in the process of doing that.”

The US President said he is still considering whether to include oil from those countries as part of his import taxes.

"We may or may not," Trump told reporters in the Oval Office. "We're going to make that determination probably tonight."

Trump said his decision will be based on whether the price of oil charged by the two trading partners is fair.

After he made his comments, the US dollar reached a daily high, while the Canadian dollar and Mexican peso both plunged.

The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration.

US daily production during that month averaged nearly 13.5 million barrels a day.