In a stunning ratcheting up of trade tensions, President Donald Trump’s broad 25% tariffs on Mexican and Canadian imports went into effect on Tuesday, a dramatic shift in U.S. economic policy. The action, meant to pressure America’s most important trading partners, threatens to fuel a potential economic slowdown in North America, including in the United States.
The tariffs come as part of a steep rise in duties on Chinese imports, which have been doubled to 20% from 10%. The new measures come in addition to previous tariffs already in place on hundreds of billions of dollars’ worth of Chinese imports.
While President Trump provided Canada and Mexico with a plenty of time to stem the pernicious cartel activity and flow of deadly drugs into our nation, they have failed to act sufficiently,” the White House said just ahead of the tariffs going into effect.
The move is made during a period of economic instability, with inflation still a priority concern and recent reports of decelerating U.S. economic growth. The tariffs will raise prices on a broad array of consumer products imported from the three countries, combined they represented $1.4 trillion of the US imports last year-more than 40% of the US total imports based on Commerce Department statistics.
The long-term economic effects of the measures are unclear, but the action has already caused alarm among policymakers and business groups about the possibility of disrupting trade and raising American consumers’ costs.