National flags representing the United States, Canada, and Mexico fly in the breeze in New Orleans where leaders of the North American Free Trade Agreement met, April 21, 2008. AP-Yonhap
U.S. President Donald Trump on Saturday ordered 25percent tariffs on Canadian and Mexican imports and 10percent on goods from China starting on Tuesday and declared that they would remain in place until a national emergency over the drug fentanyl and illegal immigration to the U.S. ends.
Energy products from Canada will have only a 10percent duty, but Mexican energy imports will be charged the full 25percent, officials told reporters.
A White House fact sheet on the duties said they would remain in place "until the crisis alleviated," but it did not provide details on what actions the three countries would need to take to win a reprieve.
The moves follow through on a repeated threat Trump has made since shortly after winning last year's presidential election, and they likely will trigger retaliation and risk igniting a trade war that could cause broad economic disruption for all countries involved.
The three countries are the top U.S. trade partners, sparking fears that the duties will lead to higher prices.
Provincial officials and business executives in Canada reacted with outrage, calling for forceful tariffs on imports from the U.S. A senior Mexican official said Mexico would respond with retaliatory tariffs.
Tariff collections are set to begin at 12:01 a.m. EST (0501 GMT) on Tuesday, according to Trump's written order. But imports that were loaded onto a vessel or onto their final mode of transit before entering the U.S. prior to 12:01 a.m. Saturday would be exempt from the duties.
Trump has declared the national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs, which allow the president sweeping powers to impose sanctions to address crises.
However, they are untested for broad tariffs, according to trade lawyers.
White House officials said there would be no exclusions from the tariffs and if Canada, Mexico or China retaliated against American exports, Trump would likely increase the U.S. duties.
Ontario Premier Doug Ford said in an X social media post that Canada "now has no choice but to hit back and hit back hard."
"As Premier of Ontario, the federal government has my full support for a strong and forceful response that matches U.S. tariffs dollar for dollar," Ford said.
Nova Scotia's Premier Tim Houston said he directed that all alcohol imported from the U.S. be removed from the province's store shelves.
Canadian Prime Minister Justin Trudeau, who has previously threatened strong retaliation if Trump imposed tariffs, was expected to speak later on Saturday.
Mexico's Economy Ministry said it did not have an immediate comment. But a senior Mexican official told Reuters that Mexico would respond with retaliatory tariffs later on Saturday.
The White House officials said that Canada specifically, would no longer be allowed the "de minimis" U.S. duty exemption for small shipments under $800. The officials said Canada, along with Mexico, has become a conduit for shipments of fentanyl and its precursor chemicals, into the U.S., via small packages that are not often inspected by customs agents.
Fishing boats tied up in Bay de Verde, Newfoundland, Canada, Feb. 1, after tariffs were imposed by the U.S. on Canadian exports. Reuters-Yonhap
Two-week tariffs
Trump, who golfed at his Mar-a-Lago estate in Florida on Saturday before signing the order, was not scheduled to speak to reporters about the tariffs.
Trump threatened the tariffs to press for strong action to halt the flow of the opiate fentanyl and precursor chemicals into the U.S. from China via Mexico and Canada, as well as to stop illegal immigrants crossing U.S. borders.
Less than two weeks into his second term, Trump is upending the norms of how the United States is governed and interacts with its neighbors and wider world.
On Friday, he pledged to proceed with the levies despite acknowledging they could cause disruption and hardship for American households.
A model gauging the economic impact of Trump's tariff plan from EY Chief Economist Greg Daco suggests it would reduce U.S. growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in "stagflation" at home.
"We have stressed that steep tariff increases against U.S. trading partners could create a stagflationary shock - a negative economic hit combined with an inflationary impulse - while also triggering financial market volatility," Daco wrote on Saturday.
That volatility was evident on Friday, when the Mexican peso and Canadian dollar both slumped after Trump vowed to fulfill his threats. U.S. stock prices also fell and Treasury bond yields rose. (Reuters)