Trump Announces Tariffs on Canada, Mexico, China
US President Donald Trump announced on February 1 that starting February 4, 25% tariffs would be imposed on imports from Canada and Mexico, and 10% on goods from China, to address a national emergency over fentanyl and illegal immigration. Canadian energy products will face a 10% duty, while Mexican energy imports will be subject to the full 25%. Trump declared the national emergency under the International Emergency Economic Powers Act to support the tariffs. White House officials stated there would be no exclusions and canceled the US tariff exemption for small Canadian shipments. The move, which follows through on Trump's repeated threats, could trigger a trade war and cause widespread economic disruption. Trump set the February 1 deadline to halt the flow of fentanyl and precursor chemicals into the US via Mexico and Canada, and to stop illegal border crossings. EY chief economist Greg Daco predicts the tariff plan will reduce US growth by 1.5 percentage points this year, push Canada and Mexico into recession, and lead to stagflation domestically.