President Donald Trump’s new tariffs on China, Canada and Mexico took effect at midnight Tuesday morning, increasing the taxes that U.S. importers will pay on certain goods when they enter the country.
Effective Tuesday, U.S. imports from China, the third-largest U.S. trading partner, will be subject to a new 10% tariff on top of the initial 10% tariff he imposed on Chinese goods last month.
Tariffs on imported goods from Canada and Mexico – America’s two largest bilateral trading partners, according to Census Bureau data – are also set to rise, with 25% tariffs levied on all imports from the two countries. The tariffs include a carve-out for a lower 10% tariff on Canadian oil imports.
President Trump was asked on Monday whether there was room left for any room left for Canada or Mexico to make a deal to avoid tariffs and he replied, “No room left for Mexico or for Canada. No, the tariffs, you know, they’re all set. They go into effect tomorrow.”
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Shortly after taking office in January, Trump announced he would impose tariffs on the three countries and cited the flows of illegal fentanyl shipments across the Mexican and Canadian borders, as well as precursor chemicals for fentanyl shipped from China. He cited authority under the International Emergency Economic Powers Act (IEEPA).
While the China tariffs were implemented on schedule, the president delayed the Canada and Mexico tariffs for a month after the two countries announced border security measures.
“Just so you understand, vast amounts of fentanyl have poured into our country from Mexico and, as you know, also from China, where it goes to Mexico and goes to Canada. And China also had an additional 10%, so it’s 10 plus 10. And it comes in from Canada, and it comes in from Mexico, and that’s a very important thing to say,” Trump said during Monday’s press conference.
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U.S. trading partners have already signaled they will retaliate through their own tariffs on American exports, as well as potential non-tariff trade barriers that would be aimed at U.S. firms.
Canada announced that it will impose a 25% tariff on a wide variety of American exports, including machinery, auto parts, apparel products, alcohol and tobacco, sports equipment, plastic products, construction materials, lumber, agricultural products, appliances, furniture, chemicals and more.
It also plans additional tariffs on other U.S.-made products that are expected to include cars, trucks, buses, electric vehicles (EVs), recreational vehicles, steel and aluminum products, fruits and vegetables, beef, pork, dairy products and more.
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Mexico’s government signaled in February that it is planning retaliatory tariffs it would implement if Trump imposed tariffs on Mexico, though it didn’t specify those measures at the time. A report by Reuters citing sources familiar with the matter suggested the potential tariffs could range from 5% to 20% on U.S. pork, cheese, produce, and manufactured steel and aluminum.
China retaliated against the initial tariffs by imposing 15% tariffs on U.S. energy exports, including coal, natural gas and petroleum; as well as 10% tariffs on manufactured goods, including trucks and agricultural machinery, a Brookings Institution analysis noted.
The newly imposed tariffs are expected to elicit more retaliation from China, as the AP reported that the Chinese government is eyeing tariffs on U.S. agricultural exports and food products as targets.
An analysis by the Tax Foundation found that the tariffs imposed on imports from China would reduce long-run GDP by 0.1%, while the tariffs on Canadian and Mexican goods would deal a bigger blow to economic output, reducing GDP by 0.3%. Those figures are before accounting for retaliation by those countries against American products.
The Tax Foundation’s analysis noted that the U.S. imported $292 billion of non-energy products from Canada in 2024, as well as $120 billion in energy products. Imports from Mexico totaled $504 billion last year, while those from China totaled $430 billion plus additional imports shipped using the “de minimis” loophole.
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