President Donald Trump is set to introduce new tariffs on Saturday, targeting major US trade partners Canada, Mexico, and China. Ottawa has been informed that these levies will take effect within days.
The US government has advised Canada to expect 25 per cent tariffs on its exports from Tuesday, except for energy products such as oil, which will face a 10 per cent duty, according to a Canadian government source speaking to AFP. The official, who was not authorised to speak publicly, disclosed the details.
Trump has also threatened a 25 per cent tariff on Mexican imports, citing both North American neighbours’ failure to curb illegal immigration and the flow of fentanyl into the US. Regarding China, Trump pledged a 10 per cent tariff, alleging its involvement in the production of synthetic opioids.
Analysts warn that these measures could disrupt supply chains across industries including energy, automotive, and food production.
Trump has long championed tariffs and hinted that Saturday’s move could be the beginning of further trade disputes. This week, he also pledged to impose tariffs on the European Union and on sectors such as semiconductors, steel, aluminium, oil, and gas, without specifying which countries would be targeted.
Trump returned to his Mar-a-Lago estate in Florida for the weekend with no scheduled public engagements. He was seen heading to the golf course on Saturday morning.
Canadian Prime Minister Justin Trudeau is expected to hold a press conference at approximately 6:00 pm (2300 GMT), according to two Canadian government sources.
Economic Concerns
Imposing broad tariffs on three key US trading partners poses economic risks for Trump, whose re-election victory was partly attributed to public concern over the economy.
Higher import costs are likely to “dampen consumer spending and business investment,” warned EY chief economist Gregory Daco. He predicts inflation could rise by 0.7 percentage points in the first quarter before stabilising.
“Increasing trade policy uncertainty will heighten financial market volatility and strain the private sector, despite the administration’s pro-business rhetoric,” Daco added.
Trump’s supporters have downplayed inflation fears, suggesting that his proposed tax cuts and deregulation measures could offset economic concerns. However, Democratic lawmakers criticised the move, with Senate Minority Leader Chuck Schumer warning on Friday: “I am concerned these new tariffs will further drive up costs for American consumers.”
Canada and Mexico are major suppliers of US agricultural products, with imports from each country amounting to tens of billions of dollars annually. The tariffs will also impact the automotive sector significantly, as Canadian and Mexican vehicle imports accounted for 22 per cent of all light vehicle sales in the US in 2024, according to S&P Global Mobility. The research firm added that the interconnected supply chain in North America will likely lead to increased production costs.
Canada and Mexico Prepare Response
Trudeau stated on Friday that Canada is ready to issue a “purposeful, forceful” response. Ontario Premier Doug Ford cautioned that the impact of these tariffs would be felt immediately, predicting job losses and business slowdowns. “Canada should hit back hard and hit back strong,” he said during a local election campaign stop.
Mexican President Claudia Sheinbaum previously stated that her government would remain calm and had plans in place to respond to any US actions.
Despite these concerns, White House Press Secretary Karoline Leavitt on Friday dismissed fears of a trade war.
Economists warn that increasing tariffs on crude oil imports from Canada and Mexico could have serious consequences for US energy prices, particularly in the Midwest. According to the Atlantic Council’s David Goldwyn and Joseph Webster, such tariffs could lead to significant market disruptions.
Trump acknowledged on Friday that he is considering a lower tariff rate for oil. Canada currently supplies nearly 60 per cent of US crude oil imports, according to a Congressional Research Service report. While Canadian producers would absorb some of the impact, US refiners would also face higher costs, said Tom Kloza of the Oil Price Information Service.