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President Trump plans tariffs on Mexico and Canada
U.S. Commerce Secretary Howard Lutnick said on Sunday that tariffs on Canada and Mexico will go into effect on Tuesday, but that President Donald Trump will determine whether to stick with the planned 25% level. LiveNOW from FOX host Stephanie Coueignoux spoke to author, Sandra Swirski on the latest.
WASHINGTON - President Donald Trump has officially doubled tariffs on Chinese imports to 20% and confirmed that 25% tariffs on imports from Mexico and Canada will take effect Tuesday.
The move, which Trump says is aimed at curbing fentanyl trafficking and illegal immigration, has renewed fears of a trade war with America’s top three trading partners.
RELATED: Trump: 25 percent tariffs on imports from Mexico, Canada to start Tuesday
The U.S. conducted nearly $2.2 trillion in trade with Mexico, Canada, and China last year, and businesses are bracing for higher prices and possible retaliation. Canadian Foreign Minister Mélanie Joly has already announced.
U.S. President Donald Trump speaks during a Cabinet meeting at the White House on February 26, 2025 in Washington, DC. (Photo by Andrew Harnik/Getty Images)
What to expect from the new tariffs
The backstory:
The latest tariffs mark the most aggressive trade measures of Trump’s presidency, with major implications across multiple industries.
Trump first imposed a 10% tariff on Chinese imports in February but doubled the rate after what he described as China’s failure to stop fentanyl trafficking into the U.S. Treasury Secretary Scott Bessent defended the move, telling CBS News that China would "eat" the cost of the tariffs rather than passing them on to American consumers.
However, analysts warn that companies like Ford and Walmart could see major cost increases, potentially raising prices on everyday goods.
Mexico and Canada face 25% tariffs
What's next:
Trump had previously granted Mexico and Canada a one-month delay on tariffs while both nations pledged efforts to crack down on drug smuggling and illegal immigration.
However, he declared Monday that "there’s no room left" for negotiations. Mexican President Claudia Sheinbaum has signaled that her country is prepared to respond, while Canada is imposing counter-tariffs and continuing diplomatic efforts.
The new duties will also impact key energy imports from Canada, including oil, natural gas, and electricity, which will be taxed at a reduced 10% rate. This is expected to raise fuel costs in the U.S., particularly in the Northeast and Midwest.
How businesses and consumers could be impacted
Why you should care:
Companies ranging from auto manufacturers to grocery chains have warned of price hikes resulting from the tariffs.
The Peterson Institute for International Economics estimates that American families could face an average cost increase of over $1,000 per year due to higher import prices.
S&P Global Mobility has also projected that tariffs on auto imports from Mexico and Canada could raise new car prices by $3,000 on average, further straining an already expensive auto market.
The Source: This report is based on information from the Associated Press, official statements from President Donald Trump and members of his administration, and remarks from government officials in Canada, Mexico, and China.