PALM BEACH, Fla. — President Donald Trump on Saturday 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.
Trump is declaring an economic emergency to put duties of 10 percent on all imports from China and 25 percent on almost all imports from Mexico and Canada, America’s largest trading partners. Canadian oil, which makes up 95 percent of Maine’s heating oil market and has been a major focus of politicians here, will face a 10 percent tariff.
The White House said Trump’s order also includes a mechanism to escalate the rates if the countries retaliate against the U.S., as they have threatened. Trump says the tariffs are to force the countries to do more to stop the flow of fentanyl into the U.S., but they 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,” 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 destabilize 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 Trump to more aggressively address illegal immigration and fentanyl smuggling. Trump’s move against China is also tied to fentanyl and comes on top of existing import taxes.
Trump’s intentions drew a swift response from financial markets, with the S&P 500 stock index slumping after his announcement Friday. Tariffs tend to raise prices for consumers and businesses by making it more expensive to bring in foreign goods.
Brad Setser, a senior fellow at the Council on Foreign Relations, noted on the social media site X that the tariffs “would be a massive shock — a much bigger move in one weekend than all the trade action that Trump took in his first term.”
Recent research on Trump’s various tariff options by a team of economists suggested the trade penalties would be drags on growth in Canada, Mexico, China and the U.S. But Wending Zhang, a Cornell University economist who worked on the research, said the fallout would be felt more in Canada and Mexico because of their reliance on the U.S. market.
Canadian Prime Minister Justin Trudeau told Canadians that they could be facing difficult times ahead, but that Ottawa was prepared to respond with retaliatory tariffs if needed and that the U.S. penalties would be self-sabotaging.
Mexico President Claudia Sheinbaum has stressed that her country has acted to reduce illegal border crossings and the illicit trade in fentanyl. While she has emphasized the ongoing dialogue since Trump first floated the tariffs in November, she has said that Mexico is ready to respond, too.
Mexico has a “Plan A, Plan B, Plan C for what the United States government decides,” she said.
Trump still has to get a budget, tax cuts and an increase to the government’s legal borrowing authority through Congress. The outcome of his tariff plans could strengthen his hand or weaken it.
Two of Maine’s statewide elected officials, Democratic Gov. Janet Mills and Republican U.S. Sen. Susan Collins, have criticized the tariffs, fearing major price hikes on heating oil prices as well as hits for lobstermen, farms and the forest products industry.
“The president campaigned on bringing down the price of eggs, bread, heat, housing and cars,” Mills said in a statement. “These tariffs will do the opposite.”
BDN writer Michael Shepherd contributed to this report.
