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President Donald Trump announced on Monday that the United States will impose 25% tariffs on imports from Mexico and Canada starting Tuesday, igniting fresh fears of a potential North American trade war.
“Tomorrow – tariffs 25% on Canada and 25% on Mexico. And that’ll start,” Trump told reporters in the Roosevelt Room. The tariffs are part of Trump’s ongoing efforts to pressure both neighboring countries to intensify their actions against fentanyl trafficking into the U.S.
The announcement follows a one-month delay granted in February, during which both Mexico and Canada promised concessions. However, Trump stated that there is “no room left for Mexico or for Canada” to avoid the significant new tariffs.
Impact on Markets and Consumers
The U.S. stock markets experienced sharp declines following Trump’s remarks, reflecting investor concerns over the broader economic consequences of the tariffs.
Economic experts have warned that tariffs of this scale could drive up prices for a wide range of goods. Importers often pass on higher costs to consumers, potentially increasing the price of essentials such as tomatoes, tequila, and auto parts.
Higher tariffs could particularly affect the automobile industry, which relies heavily on supply chains that span Mexico, Canada, and the U.S. “The increased costs for car production will be a major challenge for U.S. automakers,” one expert previously told ABC News.
Impact of Tariffs on Key Imports
According to the U.S. Energy Information Administration, Mexico and Canada together account for 70% of U.S. crude oil imports — a critical input for the nation’s gasoline supply. Higher tariffs on these imports could have significant ripple effects on fuel prices.
In the agricultural sector, Mexico is the largest source of U.S. agricultural imports, with $38.5 billion worth of goods shipped in 2023, according to U.S. Department of Agriculture (USDA) data. This includes more than $3 billion in fresh fruits and vegetables.
USDA data also shows that approximately 90% of the avocados consumed in the U.S. last year came from Mexico. Other heavily imported products from Mexico include tomatoes, cucumbers, bell peppers, jalapeños, limes, and mangoes.
Additional Tariffs on Chinese Goods
In addition to the tariffs on North American imports, Trump announced plans to impose an additional 10% tariff on goods from China, which will be added to the 10% tariff already introduced last month. The move signals a broader escalation in the administration’s trade policies, further heightening concerns about rising consumer prices and economic instability.
The new tariffs are expected to have far-reaching effects across various industries and consumer goods, with analysts warning that American shoppers are likely to bear the brunt of the increased costs.
Also Read: Trump Tells US Farmers To ‘Have Fun’ As POTUS Announces Tariffs On External Agricultural Products
