Trade tensions escalate as Trump imposes new tariffs on US neighbours, China

President Donald Trump will impose a 25% tariff on goods from Mexico and Canada, alongside a 10% tariff on Chinese products, beginning today, February 1. 

The announcement was confirmed by White House press secretary Karoline Leavitt during daily briefing, Caliber.Az reports.

While Leavitt did not specify which products will be affected or how the tariffs will be implemented, the move follows months of threats from Trump.

The tariffs on Mexico and Canada — key trade partners under the USMCA agreement—have raised concerns among US businesses and consumers about rising prices on everyday goods. Products ranging from avocados to gasoline, lumber, and auto parts could see significant price hikes as a result of the new measures.

In a press conference on January 29, Trump reiterated his plan to impose tariffs as part of a broader strategy to pressure Mexico and Canada to take stronger actions against illegal immigration and drug trafficking into the US. The tariffs on China are also being enacted in response to ongoing concerns about the country’s role in fentanyl trafficking. These products are already subject to tariffs from the US-China trade war during Trump’s first term.

It remained uncertain which goods would be impacted by the tariffs, with Trump mentioning that he would make a last-minute decision on whether to include oil, a key export from both Mexico and Canada. Experts warn that imposing tariffs on oil could significantly drive up gasoline prices, a crucial economic indicator for American consumers.

Trump has suggested that the tariffs could increase depending on the actions taken by Mexico and Canada in response. Both countries have indicated they would retaliate with their own tariffs on American goods if the US follows through. A trade war between these neighbouring countries could have far-reaching consequences for their economies, as well as for global trade. In 2024, US-Mexico trade reached approximately $776 billion, while trade between the U.S. and Canada totalled around $700 billion.

Trump has long threatened tariffs on US trading partners, a stance he maintained throughout his election campaign and into his presidency. In preparation for the potential price increases, American businesses have been stockpiling goods, with December imports seeing a sharp rise. Consumers have also been making early purchases, particularly of items like televisions, which Mexico is a major exporter of, to avoid future price hikes.

By Tamilla Hasanova