(WASHINGTON D.C.) — President Donald Trump on Monday evening indicated that he would consider imposing a 25% tariff on Canada and Mexico, two of the United States largest trading partners, on or by February 1st.
Amid a slew of executive orders signed by President Trump on Monday evening, there was no official action regarding the often threatened tariffs on our neighbors to the north and south, who are part of the U.S.-Mexico-Canada Agreement (USMCA) that was negotiated during the first Trump administration. However, there was an executive action signed on Monday directing the Commerce and Treasury secretaries to investigate the causes of U.S. trade deficits with foreign nations. The action also calls on government agencies to examine and analyze the USMCA.
Earlier this month, Alberta premier Daniel Smith met with President Trump in Florida ahead of his inauguration and she indicated that Americans and Canadians should brace for a trade war between the two countires.
“I haven’t seen any indication in the comments that he had with me that he’s inclined to change his approach,” said Smith. “And if we put across-the-board 25 percent tariffs in place on American goods, that makes the cost of everything more expensive. This is why tariff wars are so painful. You end up hurting yourself in trying to retaliate.”
Canada and Mexico are two of the United States top three trading partners. According to 2023 data, exports to Canada were $353.2 billion and $323.2 billion to Mexico. Imports from Canada to the U.S. were $421.1 billion and $475.6 billion for Mexico.
According to a new report from Joe Glauber at the American Enterprise Institute, the United States imported over $200 billion in agricultural products in fiscal year (FY) 2024 while exporting over $170 billion. Glauber says in his report that tariffs would raise market-wide prices on many consumer products, such as fresh fruits and vegetables, and impose costs on US producers that use imports of inputs such as fertilizers and of live cattle and hogs that are processed and slaughtered in the United States. Further, new tariffs risk sparking retaliations by other countries that could harm US agricultural exports, as happened during the first Trump administration’s trade wars, according to Glauber’s report.
