US President Donald Trump has said that his administration will impose a 25% tariff on imports from Canada and Mexico starting February 1. However, he clarified that a final decision on whether these tariffs would include oil imports from the two nations has yet to be made.
Speaking from the Oval Office, Trump stated that the move aims to address undocumented migration, the flow of fentanyl into the US, and trade imbalances with its neighboring countries. “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, indicating that new tariffs on Chinese imports were also under consideration. While he had previously suggested a 10% tariff on Chinese goods, he did not provide further details.
During his election campaign, Trump threatened tariffs of up to 60% on Chinese-made products but refrained from immediate action upon re-entering the White House. Instead, he directed his administration to study the issue. US imports from China have remained flat since 2018, a trend attributed in part to the series of tariffs imposed during Trump’s first term.
The potential for escalating trade tensions has drawn international attention. At the World Economic Forum in Davos, Chinese Vice Premier Ding Xuexiang called for a “win-win” approach to trade disputes and emphasized China’s commitment to increasing imports. Although he did not mention the US directly, his remarks highlighted concerns over renewed economic hostilities between the world’s two largest economies.
Canada and Mexico have responded to the US tariff threat by signaling their intent to introduce countermeasures while working to address Washington’s concerns. If tariffs are applied to oil imports from these countries, it could have significant economic repercussions. The move risks undermining Trump’s promise to lower the cost of living, as energy tariffs could raise prices for businesses and consumers. Given that about 40% of the crude processed in US refineries is imported, with Canada being the primary supplier, such measures could increase costs for fuel and other essential goods.
Tariffs function as taxes on foreign-produced goods, theoretically making them less attractive to consumers in favor of domestic alternatives. However, they can also lead to higher prices for imported necessities, affecting a broad range of industries and households.
IMEX SECTOR | Australia’s Wine Exports Surge After Tariffs Lifted, but Future Demand Uncertain
