On 1 February, US President Donald Trump has declared that he will proceed with his pledge to impose 25% border taxes, or tariffs, on imports from Canada and Mexico.
However, he also stated that a determination regarding whether or not this would encompass oil from those nations has not yet been made.
In an interview with reporters in the Oval Office, Trump stated that the initiative was intended to address the significant quantities of undocumented migrants and fentanyl that cross US borders, as well as trade deficits with its neighbors.
The president also hinted that he was still considering implementing new tariffs on China, which he had previously stated would be 10%. However, he did not provide any further details.
Trump’s Tariff Strategy: Aimed at Trade Deficits and Drug Trafficking
“With China, I’m also thinking about something because they’re sending fentanyl into our country, and because of that, they’re causing us hundreds of thousands of deaths,” the president stated.
“So China is going to end up paying a tariff also for that, and we’re in the process of doing that.”
Trump threatened to impose tariffs of up to 60% on Chinese-made products during the election campaign. However, he refrained from taking any immediate action on his first day back in the White House, instead instructing his administration to investigate the matter.
Economists have attributed the flattening of US goods imports from China since 2018, a statistic that has been attributed in part to a succession of escalating tariffs that Trump imposed during his first term.
Canada and Mexico’s Response to US Tariffs: What Measures Are Being Considered?
A senior Chinese official issued a warning against protectionism earlier this month, as the prospect of a trade war between the world’s two largest economies was reignited by Trump’s return to the presidency. However, the official did not specifically reference the United States.
Ding Xuexiang, the Vice Premier of China, stated at the World Economic Forum in Davos, Switzerland, that his country was seeking a “win-win” solution to trade tensions and was interested in increasing its imports.
In addition to attempting to reassure Washington that they were taking action to resolve concerns about their US borders, Canada and Mexico have stated that they would respond to US tariffs with their own measures.
Trump’s pledge to reduce the cost of living may be jeopardized if levies are imposed on US imports of crude from Canada and Mexico.
Tariffs are an import tax that is imposed on products that are manufactured abroad.
In theory, the imposition of taxes on imported goods reduces the likelihood of their purchase as they become more expensive.
The objective is to encourage consumers to purchase locally produced goods at a reduced cost, thereby stimulating the economy of the nation.
However, the cost of tariffs on imported energy could be borne by businesses and consumers, potentially leading to an increase in the price of a variety of items, including petrol and foodstuffs.
About 40% of the crude that passes through US oil refineries is imported, with the preponderance of it originating from Canada.
