Washington: President Donald Trump said Monday that he expects to put 25% tariffs on Canada and Mexico starting on Feb. 1, while declining to flesh out his plans for taxing Chinese imports. Trump made the announcement in response to reporters' questions while signing executive actions in the Oval Office on his first day back in the White House.
Trump threatened tariffs of as much as 60% on China during his campaign, but appeared to temper his plans after a phone call last week with Chinese President Xi Jinping. He said Monday there would be more discussions with his counterpart in the world’s second largest economy.
“We’re going to have meetings and calls with President Xi,” Trump said.
Trump is placing a big bet that his executive actions can cut energy prices and tame inflation and that the tariffs will strengthen the economy instead of exposing consumers to higher prices. But it's unclear whether his orders will be enough to foster the growing economy with lower prices that he promised voters.
Trump specifically blamed the inflation on the $1.9 trillion in pandemic aid provided in 2021 by then-President Joe Biden, while saying that his predecessor's policies restricted oil drilling despite domestic output being near record levels. “The inflation crisis was caused by massive overspending,” Trump said in his inaugural address.
Orders on Monday included opening up the Arctic National Wildlife Refuge in Alaska to oil drilling and easing the regulatory burdens on oil and natural gas production. He also declared a national energy emergency in hopes of jumpstarting more electricity production in the competition with China to build out technologies such as artificial intelligence that rely on data centers using massive amounts of energy.
Trump also signed a directive telling federal agencies to conduct a 30-day review of how they can help to lower the costs of housing, health care, food, energy and home appliances as well as finding ways to bring more people into the workforce.
Another measure he signed will keep the social media platform TikTok open for 75 days so it can find a U.S. buyer, instead of shutting it down. Trump also signed a measure telling federal agencies to study trade policies and have the Treasury and Commerce departments advise on how to create an “External Revenue Service” for collecting customs and duties tied to trade. The measure set a series of April deadlines.
Still, Trump wanted to make clear on Monday in his speeches that he was eager to impose taxes on imports. Trump pledged in his inaugural address that tariffs would be coming and said foreign countries would be paying the trade penalties, even though those taxes are currently paid by domestic importers and often passed along to consumers. Trump later on Monday said tariffs would "make us rich as hell."
Canada says ready to respond if Trump follows through
Top Canadian ministers said Monday that Canada will be ready to retaliate after Trump said he was thinking of imposing a 25% tariff on Canada and Mexico on Feb. 1. Canadian Foreign Minister Mélanie Joly said they “will continue to work on preventing tariffs” but said they are also “working on retaliation.” Canadian Finance Minister Dominic LeBlanc said Trump can be unpredictable.
“None of this should be surprising," he said. “Our country is absolutely ready to respond to any one of these scenarios.” Canadian leaders earlier expressed relief the tariffs were not imposed on the first day of Trump taking office.
Canada is one of the most trade-dependent countries in the world, and 75% of Canada’s exports, which include automobiles and parts, go to the U.S. Canada is the top export destination for 36 U.S. states. Nearly $3.6 billion Canadian (US$2.7 billion) worth of goods and services cross the border each day.
Despite Trump’s claim that the U.S doesn’t need Canada, a quarter of the oil America consumes per day is from there. “It would be a mistake for the American government to proceed with imposing tariffs, in terms of the cost living in the United States, in terms of jobs in the United States and the security of supply chains,” LeBlanc said.
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