Trump to impose tariffs on China, Canada and Mexico

"The February 1 deadline that President Donald Trump set in a proclamation a few weeks ago remains in effect. Both Canada and Mexico have allowed an unprecedented influx of illegal fentanyl that is killing American citizens. They have also allowed illegal immigrants to enter our country," White House spokeswoman Karoline Leavitt said at a press briefing on January 31.

Mr. Trump previously announced that he would impose a 25% tariff on neighboring countries Canada and Mexico from February 1 (afternoon of February 1, Hanoi time), citing the failure to prevent illegal immigration and the flow of fentanyl (addictive painkiller) into the US. He also threatened to impose a 10% tariff on Chinese goods because of the fentanyl issue.

Spokesperson Leavitt did not mention which sectors would be exempt from the new tariffs and dismissed warnings that the move would spark a trade war.

Mr. Trump also told reporters in the Oval Office on January 31 that he would "certainly" impose tariffs on the European Union (EU) in the future, because the bloc has "treated us very badly."

Canadian Prime Minister Justin Trudeau said he would "respond immediately" if the US imposed tariffs, while Mexican President Claudia Sheinbaum said her government was in close contact with the Trump administration.

The US president has not yet specified the tools for imposing tariffs, although analysts say he could use emergency economic powers, which allow the president to regulate imports during a national emergency. However, this could be hampered by litigation.

Some analysts believe the tariff threat is a bargaining chip to speed up renegotiations of the existing USMCA trade deal between the United States, Mexico and Canada.

Tariffs are paid by US businesses to the government when they buy goods from abroad, and the economic burden from new tariffs can fall on importers, foreign suppliers or consumers.

Wendong Zhang of Cornell University in New York said Canada and Mexico would lose 3.6% and 2% of their real GDP (GDP adjusted for inflation) respectively, while the US would lose 0.3% of its real GDP, when the new tariffs are imposed. Analysts at Oxford Economics, a leading global economic consultancy, warned that tariffs and retaliation could push Canada and Mexico into recession, with the US also at risk of a mild recession.

Canada will export nearly 80% of its goods to the US in 2023 and account for nearly 60% of US crude oil imports. It is unclear whether oil imports will be exempt from the new tariffs.

Mr Trump is also considering imposing additional tariffs on Chinese goods. During his campaign, he floated the idea of ​​imposing a 60% or higher tax on imports from China.

Beijing has vowed to defend its “national interests”. A Chinese Foreign Ministry spokesman earlier warned that “no one wins in a trade war”.