Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
Donald Trump will carry out his threats to impose steep new tariffs on Canada, Mexico and China this weekend, the White House has said, in a move that could trigger the first trade war of his new presidency.
Washington will hit Canada and Mexico with 25 per cent tariffs and China with 10 per cent levies, White House press secretary Karoline Leavitt told reporters on Friday.
“The February 1 deadline that President Trump put into place in a statement several weeks ago continues,” Leavitt said.
“The president has made it very clear: those tariffs are going to be implemented and in effect,” Leavitt said. “If the president, at any time, decides to roll back those tariffs, I’ll leave it to him to make that decision. But starting tomorrow, those tariffs will be in place.”
Hitting the US’s three-largest trading partners with steep tariffs sharply raises the risks of igniting the first full-blown trade war of Trump’s second presidency in just his second week in the White House.
Both Canada and Mexico have prepared packages of retaliatory tariffs, according to people familiar with the process, and are ready to immediately apply them.
“We’re ready with a response — a purposeful, forceful but reasonable, immediate response,” Canadian Prime Minister Justin Trudeau said on Friday, as he warned Canadians, “our nation could be facing difficult times in the coming days and weeks”.
Canada’s former finance minister Chrystia Freeland, who is running to replace Trudeau, also said on Friday that Ottawa should retaliate against any US tariffs by adding huge levies on Tesla vehicles to punish Elon Musk, one of Trump’s top allies.
The White House’s plans to push ahead with the trade measures came after earlier reports said they could be delayed until March, something Leavitt described as “false”.
“These are promises made and promises kept by the president,” she said.
Trump first threatened to hit Canada, Mexico and China with steep tariffs in November, accusing them of allowing illegal migration and not doing enough to halt trade in fentanyl, an illegal and deadly opioid.
Business lobbyists in Washington, worried about effects on US supply chains and the costs of goods, have hoped that the president would take a more moderate approach and not immediately apply a 25 per cent levy.
Other options included delaying the tariffs to allow the Canadian and Mexican governments more time to negotiate with the Trump team over border security, or introducing the tariffs gradually and increasing them up over time.
On Thursday, Trump said he was considering excluding oil imports from the tariffs — reflecting the US’s dependence on its neighbour for huge supplies of energy. Canada accounts for about one in every five barrels of oil consumed in the US and about 60 per cent of its imported crude.
Leavitt said on Friday that she did “not have an update or a readout” on any potential exemptions, but the tariffs would be made public on Saturday.
Currencies whipsawed, with the Canadian dollar swinging from a strong gain to a small loss by Friday afternoon in New York, at C$1.45 to the dollar. The Mexican peso also shed large gains to trade flat. A gauge of the US dollar against six other peers was up 0.6 per cent.
Additional reporting by Harriet Clarfelt
Credit: Source link