President Donald Trump said, “I will put very serious tariffs or stop trading with Europe, on many things.” File
| Photo Credit: AP

U.S. President Donald Trump looks on, as he signs an executive order in the Oval Office at the White House in Washington, U.S.,
| Photo Credit: Reuters

U.S. President Donald Trump on Saturday (February 1, 2025) signed an order to impose stiff tariffs on imports from Mexico, Canada and China, fulfilling a campaign promise but raising the prospect of increased prices for American consumers.

Mr. Trump is declaring an economic emergency to put duties of 10% on all imports from China and 25% on imports from Mexico and Canada — America’s largest trading partners — except for a 10% rate on Canadian oil.

The White House said Mr. Trump’s order also includes a mechanism to escalate the rates if the countries retaliate against the U.S., as they have threatened.

Mr. Trump says the tariffs are to force the countries to do more to stop the flow of fentanyl into the U.S., but also dovetail with his embrace of protectionist measures to boost domestic manufacturing and as a potential source of revenue for the federal government.

“You see the power of the tariff,” Mr. Trump told reporters Friday. “Nobody can compete with us because we have by far the biggest piggy bank.”

The Republican president is making a major political bet that his actions will not worsen inflation, cause financial aftershocks that could destabilise the worldwide economy or provoke a voter backlash. AP VoteCast, an extensive survey of the electorate in last year’s election, found that the U.S. was split on support for tariffs.

It is possible that the tariffs could be short-lived if Canada and Mexico can reach a deal with Mr. Trump to more aggressively address illegal immigration and fentanyl smuggling. Mr. Trump’s move against China is also tied to fentanyl and comes on top of existing import taxes.

Mr. Trump is honouring promises he made in the 2024 White House campaign that is at the core of his economic and national security philosophy, though his allies had played down the threat of higher import taxes as mere negotiating tactics.

The president is preparing more import taxes in a sign that tariffs will be an ongoing part of his second term. On Friday, he mentioned imported computer chips, steel, oil and natural gas, as well as against copper, pharmaceutical drugs and imports from the European Union — moves that could essentially pit the U.S. against much of the global economy.

Mr. Trump’s intentions drew a swift response from financial markets, with the S&P 500 stock index slumping after his announcement Friday.

It is unclear how the tariffs could affect the business investments that Mr. Trump said would happen because of his plans to cut corporate tax rates and remove regulations. Tariffs tend to raise prices for consumers and businesses by making it more expensive to bring in foreign goods.