The United States has imposed tariffs on goods imported from China, Canada, and Mexico. Under former President Donald Trump’s new policy, the US has decided to impose a 25 per cent tariff on goods imported from Mexico and Canada and a 10 per cent tariff on Chinese products.
The decision took effect on February 1, 2025. Trump announced this during a media briefing at the Oval Office.
Trump further stated that China, Canada, and Mexico have no means to avoid these tariffs. He asserted, “Tariffs do not cause inflation but rather contribute to success.”
What are tariffs?
Tariffs and taxes may seem similar as both help generate government revenue. However, they are distinct. Tariffs are levied on imported or exported goods to impact trade, often making foreign products less competitive. Taxes, on the other hand, are mandatory payments individuals and companies make to revenue authorities.
The tariffs imposed by Trump apply specifically to products imported from China, Canada, and Mexico. This means the consumer price of those goods in the US will increase, potentially encouraging consumers to choose domestically produced alternatives.
During the media briefing, Trump also hinted at imposing even higher tariffs in mid-February, specifically on oil and natural gas.
Major Imports to the US from China, Mexico, and Canada
- China: Mobile phones, laptops, tablets, televisions, electronic devices, industrial machinery, furniture, household items, ready-made clothing, footwear, plastic toys, and gift items.
- Mexico: Cars, trucks, automobile parts, televisions, medical equipment, avocados, tomatoes, alcoholic beverages, crude oil, and natural gas.
- Canada: Mineral fuels, natural gas, iron, steel, aluminum, wheat, meat, dairy products, cars, trucks, automobile parts, wood, and paper.
The White House has stated that energy resources imported from Canada will be an exception. According to officials, natural gas and oil from Canada will face a tariff of less than 10 per cent.
