Trump’s Long-Promised Tariffs Go Into Effect On Three Countries

Source: Alex Wong / Getty

President Donald Trump and his administration put the long-promised tariffs into effect at 12:01 this morning. (Mar 4)

The move impacts products coming from Mexico, Canada, and China. These countries are the three largest trading partners of the United States, meaning that it could impact prices for everything from gasoline to avocados, to IPhones.

Once Trump was inaugurated into his second term, he set March 4th as the start date for 25% tariffs on imports from Mexico and Canada. He also set a 10% tariff on Chinese goods. As of Tuesday, the administration changed the 10% tariff to a 20% tariff per an executive order.

With the tariffs going into effect, this sent major stock indexes plummeting. The S&P saw its biggest loss since December. They closed at 5,849.72, which makes them down 104.78 points. The Dow Jones Industrial Average closed at 43,191.24 down 6.49.67 points, while the tech heavy Nasdaq fell 2.64%.

Here’s What You Need To Know:

Tariffs could upend U.S. trade:

President Trump reaffirmed his commitment to placing tariffs on Canada and Mexico. On Feb 27, Trump alleged that drugs had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue. He also voiced similar concerns about Mexico and Canada ahead of the previous tariff deadline, before ultimately pausing the measures.

If the tariffs stay in place, price increases will be evident by Memorial Day of 2025.

New tariffs could raise prices for some essentials

Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers. The policy could hike prices for products ranging from tomatoes to tequila to auto parts.

The Yale Budget Lab estimated that the tariffs could cost the average household up to an additional $2,000 annually.

Higher costs for car production could pose a challenge for U.S. automakers.Many of these automakers rely on a supply chain that is closely intertwined with Mexico and Canada. Mexico and Canada account for 70% of U.S. crude oil imports, which make up a key input for the nations gasoline supply.

The U.S. imported $38.5 billion in agricultural goods from Mexico in 2023, making it the top recipient of such products. Those imports include more that $3 billion worth of fresh fruit and vegetables. Roughly 90% of avocados eaten in the U.S. last year originated in Mexico. Other products with a high concentration of Mexican imports including tomatoes, cucumbers, bell peppers, jalapeños, limes, and mangos.

Target countries may retaliate

With the fresh tariffs placed on these countries, this may trigger retaliation from Mexico, China, and Canada.

In anticipation of tariffs last month, Canadian Prime Minister Justin Trudeau threatened retaliatory tariffs on $155 billion worth of goods. He also encouraged Canadians to choose Canada-made products over their American counterparts. On Monday night, he reaffirmed that commitment, saying that Canada would start with “tariffs on $30 billion worth of goods immediately and tariffs on the remaining $125 billion on American products in 21 days’ time.”

Mexican President Claudia Sheinbaum said she had instructed officials in her government to implement Plan B. This includes tariff and non-tariff measures in defense of Mexico’s interest. Sheinbaum stated: “We are going to wait and see what happens. In that, you need to have mettle, serenity and patience, and we have Plan A, Plan B, Plan C, Plan D, so we are going to wait for today.”

Chinese Ministry of Commerce spokesperson responded to the tariff increase with a statement calling the move a “typical unilateral and bullying behavior” that will cause “damage to China-US economic and trade cooperation and the normal international trade order.”

Trump’s Long-Promised Tariffs Go Into Effect On Mexico, Canada, China — What You Need To Know was originally published on rnbphilly.com