Second Trump tariffs

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The second Trump tariffs are protectionist trade initiatives imposed by Donald Trump, the 47th president of the United States, principally in the form of tariffs imposed on foreign imports starting in 2025. Since before becoming President in 2017, Trump has promoted tariffs on imports to retaliate against countries that he believes are "ripping off" the United States. Trump has incorrectly insisted that foreign countries pay the tariffs that he imposes, rather than the reality that American importers pay them. Tariffs were imposed against China, Canada, and Mexico, continuing a trade war with China and initiating a trade war with Canada and Mexico.

Contents

Background

Mexico, China, and Canada are the three largest trade partners with the United States, accounting for 42 percent of the US$3 trillion imported by the U.S. in 2024. [1] Tariffs on Chinese imports have existed since the 1700s, generating billions in revenue for years before Trump came into office. [2]

History

Since the 1980s, Trump has argued that foreign nations were "ripping off" Americans on trade matters. After he became president in 2017, and again in 2025, he imposed tariffs against foreign nations in retaliation, incorrectly insisting those countries pay his tariffs, though the tariffs are actually paid by American importers. In 2018, Trump (as part of his first round of tariffs) started a trade war against China which was widely characterized as a failure for the United States. [3] Despite corporate executives, politicians and economists insisting trade wars are destructive to American interests, Trump continued to maintain as of late 2024 that "tariffs are the greatest thing ever invented" and can promote world peace. [4] [5]

In November 2024, posting on Truth Social, president-elect Trump pledged to impose a 25 percent tariff on all products imported to the U.S. from Canada and Mexico, that would remain in effect until the countries take steps to prevent illegal immigrants and drugs—especially Fentanyl—from entering the country. The Wall Street Journal noted it was unclear under what economic or national security jurisdiction that Trump would be able to implement such a tariff, and such actions were believed to be a violation of the United States–Mexico–Canada Agreement. [6]

Implementation

On January 31, 2025, the White House announced that it would impose a 25 percent tariff on imports from Canada and Mexico (except for Canadian crude oil and energy imports which will be subject to a ten percent tariff) [7] [8] and a ten percent tariff on imports from China. [9] Trump signed an executive order imposing tariffs the following day using the International Emergency Economic Powers Act. Canadian energy exports, including natural gas, hydroelectric power, and uranium, [10] were made subject to a ten percent tariff; Peter Navarro, Trump's trade advisor, stated that the lower rate was to "minimize any disruptive effects". [11] The order contains a clause that will increase tariffs if Canada, China, or Mexico retaliate. [12] The tariffs will take effect on February 4. [13] According to The Wall Street Journal , Canadian officials were formally notified that morning, though Mexican officials had not been informed. [14]

Impact

United States

The Peterson Institute for International Economics estimated that a 25 percent tariff, retained through 2029, would reduce the gross domestic product of the United States by US$200 billion. [15] According to the Budget Lab at Yale University, American households will lose approximately US$1,200 in purchasing power. [16] The Tax Foundation has also estimated that the tariffs would lead to a $1.2 trillion increase in U.S. tax revenue between 2025 and 2034, with the Mexican and Canadian tariffs causing a tax revenue increase of $958 billion during the same time period. [17]

Canada

Ontario premier Doug Ford stated that the tariffs would likely impact around half a million jobs in the province's automotive industry. [15]

Mexico

Peterson Institute director of studies Marcus Noland said that the tariffs would cause deindustrialization in Mexico. [15]

Responses

Canada

Prime Minister Justin Trudeau said he was prepared to quickly respond. [18]

In an interview with CNN, Ontario premier Doug Ford argued that the proposed tariffs against Canada were "unjustified, unfair, and frankly illegal", and would hurt both Americans and Canadians. He stated that Canada would most likely retaliate, explaining that "It's unfortunate. We don’t want to do it. We'd rather have a strong trading partner with the U.S., build an Am-Can fortress. We want to ship down more products, more critical minerals, more oil. That's what we want to do." [19]

On February 1, 2025, Trudeau announced in an address that Canada would impose retaliatory 25% tariffs on various U.S. goods totalling US$106 billion, including lumber, plastic, vegetables, and consumer goods such as alcohol, appliances, furniture, perfume, and sports equipment. It was also suggested that specific tariffs will target staple exports of specific Republican-led states, including Florida orange juice, Kentucky peanut butter, and Tennessee whiskey. Trudeau stated that "this is a choice that, yes, will harm Canadians, but beyond that, it will have real consequences for you, the American people. As I have consistently said, tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities". [20] [21]

Individual provinces and territories announced their own tariffs and restrictions as well; British Columbia premier David Eby announced that the BC Liquor Distribution Branch would immediately halt purchases of liquor from Republican-led states. [22] Nova Scotia premier Tim Houston announced that tolls at the Cobequid Pass would double for commercial vehicles entering from the U.S., and that the Nova Scotia Liquor Corporation would be directed to remove all U.S. liquor from store shelves. He also said that the province would limit access to provincial procurement for American businesses, stating that the province would focus on "finding new markets here at home." [23] Quebec premier François Legault and Northwest Territories premier R.J. Simpson announced that their respective governments would review and penalize all procurement contracts involving American suppliers. [24] [25] Ontario premier Doug Ford ordered the LCBO to remove all sales of American alcohol. [26]

During a National Hockey League game between the Ottawa Senators and Minnesota Wild at Canadian Tire Centre in Ottawa, fans booed "The Star-Spangled Banner" in response to the tarrifs. [27]

China

The Ministry of Commerce of China condemned the tariffs, announced China would file a legal case against the US in the World Trade Organization, and said China "will take corresponding countermeasures to firmly safeguard its rights and interests". [28] The Ministry of Foreign Affairs released a statement saying "Fentanyl is America's problem". [29]

Mexico

President Claudia Sheinbaum immediately ordered Economy Secretary Marcelo Ebrard to impose retaliatory tariffs and other non-tariff measures. She also called on Trump to engage in dialogue, saying that imposing tariffs would not resolve anything, and said that he had "slandered" her government by claiming it was allied with the drug cartels. [30] [31]

United States

Senate minority leader Chuck Schumer said that he was "concerned these new tariffs will further drive up costs for American consumers." [32] The conservative Wall Street Journal editorial board characterized the February 2025 tariffs on Canada and Mexico as "the dumbest trade war in history." [33]

Companies

In a joint statement, lobbying groups for the liquor industries in the U.S., Canada, and Mexico expressed concern for retaliatory tariffs. [34]

See also

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References

  1. ↑ Buchwald, Elisabeth (February 1, 2025). "Here's why Mexico, Canada and China are so important to US trade". CNN . Retrieved February 1, 2025.
  2. ↑ Doan, Laura (February 1, 2025). "In recent comments, Trump talks history of U.S. tariffs. Here's a fact check". CBS News . Retrieved February 1, 2025.
  3. ↑ Multiple sources:
  4. ↑ Fisher, Marc (March 7, 2018). "Over four decades, Trump's one solid stance: A hard line on trade". The Washington Post.
  5. ↑ Wiseman, Paul (September 27, 2024). "Trump favors huge new tariffs. How do they work?". Associated Press. Trump insists that tariffs are paid for by foreign countries. In fact, its is importers — American companies — that pay tariffs, and the money goes to U.S. Treasury
  6. ↑ Andrews, Natalie; Restuccia, Andrew (November 25, 2024). "Trump Pledges Tariffs on Mexico, Canada and China". The Wall Street Journal . Archived from the original on December 16, 2024. Retrieved November 25, 2024.
  7. ↑ Horsley, Scott (February 1, 2025). "Trump imposes new tariffs on imports from Mexico, Canada and China in new phase of trade war". NPR. Retrieved February 2, 2025.
  8. ↑ News, A. B. C. "'The coming weeks will be difficult': Mexico, Canada respond to Trump's tariffs". ABC News. Retrieved February 2, 2025.{{cite web}}: |last= has generic name (help)
  9. ↑ Swanson, Ana; Rappeport, Alan; Smith, Colby (January 31, 2025). "Trump Will Hit Mexico, Canada and China With Tariffs". The New York Times . Retrieved February 1, 2025.
  10. ↑ Stevis-Gridneff, Matina (February 1, 2025). "The 10 percent tariff on Canadian energy products would most likely apply to goods beyond Canada's oil, a major export to the United States". The New York Times . Retrieved February 1, 2025.
  11. ↑ Wallace, Alicia (February 1, 2025). "Trump says 10% tariff on Canadian energy aims to "minimize any disruptive effects"". CNN . Retrieved February 1, 2025.
  12. ↑ Swanson, Ana; Rappeport, Alan; Sanger, David (February 1, 2025). "Trump Imposes Steep Tariffs on Mexico, Canada and China". The New York Times . Retrieved February 1, 2025.
  13. ↑ Rappeport, Alan (February 1, 2025). "The tariffs are tentatively scheduled to go into place on Tuesday, a White House official said, speaking on the condition of anonymity given the sensitivity of the news". The New York Times . Retrieved February 1, 2025.
  14. ↑ Bade, Gavin; Andrews, Natalie; Monga, Vipal; Pérez, Santiago (February 1, 2025). "Trump Slaps Tariffs on Mexico, Canada and China in Opening Salvo of Trade War". The Wall Street Journal . Retrieved November 25, 2024.
  15. 1 2 3 Stevis-Gridneff, Matina; Swanson, Ana; Romero, Simon. "How Could Trump's Tariffs Affect the U.S., Canada and Mexico?". The New York Times . Retrieved February 1, 2025.
  16. ↑ Lynch, David (February 1, 2025). "Trump signs order imposing tariffs on Canada, Mexico and China". The Washington Post . Retrieved February 1, 2025.
  17. ↑ York, Erica (January 31, 2025). "Tracking the Economic Impact of the Trump Tariffs". Tax Foundation. Retrieved February 2, 2025.
  18. ↑ Boak, Josh (February 1, 2025). "Trump imposes tariffs on Canada, Mexico and China, spurring prospect of inflation and trade conflict". Associated Press.
  19. ↑ Arsenych, Joanna Lavoie, Alex (February 2, 2025). "'Unjustified, unfair and frankly illegal,' Doug Ford blasts Trump's tariffs". CTVNews. Retrieved February 2, 2025.{{cite web}}: CS1 maint: multiple names: authors list (link)
  20. ↑ Stevis-Gridneff, Matina (February 2, 2025). "Trudeau Details Canada's Retaliation Plans in Emotional Rebuke of Trump Tariffs". The New York Times. ISSN   0362-4331 . Retrieved February 2, 2025.
  21. ↑ Buckley, Lynn Chaya, Hunter Crowther, Michael Stittle, Rachel Aiello, Mary Nersessian, Charlie (February 2, 2025). "Canada retaliates against Trump's tariffs with 25 per cent tariffs on billions of U.S. goods: Justin Trudeau". CTVNews. Retrieved February 2, 2025.{{cite web}}: CS1 maint: multiple names: authors list (link)
  22. ↑ "B.C. premier announces countermeasures against U.S. tariffs, including ban on 'red-state' liquor". CBCNews. February 2, 2025. Retrieved February 2, 2025.
  23. ↑ "N.S. takes immediate steps to fight back against U.S. tariffs". CBC News. CBC. February 2, 2025. Retrieved February 2, 2025.
  24. ↑ "Trump Tariffs: Legault wants to penalize U.S. businesses". CTV News. CTV. February 1, 2025. Retrieved February 1, 2025.
  25. ↑ "'We are not immune,' says NWT premier as trade war appears to ignite". Cabin Radio. February 1, 2025. Retrieved February 2, 2025.
  26. ↑ "Trump Tariffs: Doug Ford announces Ontario ban on American liquor in response to U.S. tariffs". CBC News. CBC. February 2, 2025. Retrieved February 2, 2025.
  27. ↑ https://www.ctvnews.ca/ottawa/article/hockey-fans-boo-us-national-anthem-at-ottawa-senators-game-after-trump-imposes-tariffs/
  28. ↑ Bradsher, Keith (February 2, 2025). "China Assails Trump Tariffs and Threatens Legal Case With the W.T.O." The New York Times . ISSN   0362-4331 . Retrieved February 2, 2025.
  29. ↑ Krolicki, Kevin; Li, Qiaoyi (February 2, 2025). "China denounces Trump tariff: 'Fentanyl is America's problem'". Reuters . Retrieved February 2, 2025.
  30. ↑ Carrasco, Carolina (February 1, 2025). "La respuesta completa de Claudia Sheinbaum a las acusaciones de Donald Trump". Infobae. Retrieved February 2, 2025.
  31. ↑ Bekiempis, Victoria (February 1, 2025). "Trump signs order authorizing tariffs on goods from Canada, Mexico and China". The Guardian. Retrieved February 2, 2025.
  32. ↑ Rappeport, Alan (February 1, 2025). "Democrats were quick to criticize the tariffs and warn that they could fuel inflation". The New York Times . Retrieved February 1, 2025.
  33. ↑ Jones, Kipp (February 1, 2025). "'Makes No Sense': WSJ Editorial Board Savages Trump Tariffs on Allies as 'Dumbest Trade War in History'". Mediaite.
  34. ↑ Rappeport, Alan (February 1, 2025). "Business groups that will be hit by the tariffs and retaliation pushed back swiftly against the move". The New York Times . Retrieved February 1, 2025.
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