Key Takeaways
- On Saturday, the White House implemented 25% tariffs on goods from Mexico and Canada and 10% tariffs on items from China.
- Economists said these tariffs could raise already stubborn inflation, and consumers could pay more for everyday items.
- This could be just the first round of tariffs that the Trump administration could implement.
After several weeks of threats, the White House implemented tariffs on imports from some of the U.S.’s largest trading partners Saturday.
President Donald Trump ordered 25% tariffs on Mexico, 25% tariffs on Canada, and 10% tariffs on China. The three countries account for 41.7% of all imports, according to the latest data from the U.S. Census Bureau. All imports from these three countries will now be taxed at these elevated rates, with the exception of Canadian oil, which Trump’s order taxes at 10%.
| Country | $ of Goods Imported in November 2024 | Percent of Total Imports in November 2024 |
|---|---|---|
| Mexico | $466.6 billion | 15.6% |
| China | $401.4 billion | 13.5% |
| Canada | $377.2 billion | 12.6% |
| Germany | $146.7 billion | 4.9% |
| Japan | $135.8 billion | 4.6% |
Trump promised on the campaign trail that he would raise important taxes on the first day of his administration. Instead, he delayed the deadline to Feb. 1. Some economists had speculated that the threat of tariffs was likely a negotiating tactic designed to get concessions on other policy disagreements, such as immigration.
Economists have said tariffs would likely increase inflation as businesses pass on their increased costs to consumers. While it’s difficult to estimate how much of that tariff will be passed along at each stage of production, analysts at Deutsche Bank calculated that the Canadian and Mexican tariffs alone could increase core PCE inflation by up to 1.4%.
Because of their potential to increase already stubborn inflation, tariffs are a low priority for most Americans, according to polling by Morning Consult. Only 23% of voters said tariffs should be an early focus for the Trump administration, making it one of the president’s campaign promises with the least support. Alternatively, reducing the cost of goods and services was his most broadly supported initiative, with 79% of voters saying it should be Trump’s top priority.
This may not be the last tariff on the administration’s radar. During his campaign and since his election, Trump has floated the idea of potential tariffs on the European Union, which could be broad or might target specific goods.
“If President Trump’s first term is any guide, trade policy will remain a key item on the agenda over the next four years,” wrote Wells Fargo Economists Shannon Grein and Nicole Cervi.