President Donald Trump confirmed that 25% tariffs on Mexico and Canada will take effect on March 4, with no possibility of negotiating a suspension as was done last February.
“There is no room left for Mexico or Canada [for further negotiations],” Trump said. “No. They know, the tariffs are ready and go into effect tomorrow.”
This means that at 12:01 a.m. this Tuesday, the Customs and Border Protection (CBP) agency could begin collecting the additional taxes.
On February 4, the tariffs established in an executive order by President Trump were set to take effect, but negotiations with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau managed to delay their implementation by one month.
The Mexican government aimed to permanently suspend the tariffs, but despite several high-level meetings on economic, immigration, and security matters, it failed to persuade the Trump administration, even after the extradition of 29 drug traffickers to the United States.
President Trump initially stated that the tariffs were imposed due to the U.S. trade deficit with Mexico and Canada, but later shifted his argument to fentanyl trafficking, which led him to include China with a 10% tariff in his plan.
In response, Mexico increased border surveillance by deploying 10,000 members of the National Guard, while also touting new actions against drug trafficking—measures that had already been in place weeks before Trump’s threat.
The Initial Impact
Several analyses on tariffs, including one from the Tax Policy Center (TPC), indicate that while there could initially be higher tax revenue, estimated at $110 billion, that figure would drop to $75 billion over ten years due to “likely changes in consumer behavior.”
“Canada and Mexico are two of the country’s most important trading partners,” the TPC warned in February. “With a 25 percent tariff, the TPC estimates that U.S. companies would import 40 percent less from Canada and Mexico.”
Trump has argued that the tariffs will reduce the trade deficit and help rebuild manufacturing jobs, but the Economic Policy Institute dismisses that claim.
“No, primarily because broad-based, high tariffs will also reduce exports along with imports, leaving the trade balance virtually unchanged,” it explained. “Second, it is highly likely that trading partners will retaliate against U.S. tariffs with their own tariffs, making exports more expensive in international markets, as we’ve seen with ‘Made in America’ products, from Boeing airplanes to Kentucky bourbon.”
Image: Opinion
