President Donald Trump has implemented substantial new tariffs on goods from Mexico, Canada, and China, The New York Times reported, potentially triggering a damaging trade war with America's largest trading partners. The tariffs, which took effect at 12:01 a.m. Eastern time on Tuesday, follow executive orders signed by the president in February and could have far-reaching consequences for the US economy.
According to The New York Times, the tariffs are broadly applied: All imports from Canada and Mexico now face a 25% duty, with the exception of Canadian energy products, which are subject to a lower 10 % tariff. Chinese goods have been hit with a 20% tax, doubling the 10% tariff that was imposed last month, The New York Times reported. Together, these three nations account for more than a third of all products entering the United States and support tens of millions of American jobs.
The paper noted that these measures come after Trump agreed to pause the implementation of tariffs on Canada and Mexico for 30 days following promises from both governments to enhance their oversight of fentanyl trafficking and border security. The president has justified the tariffs as necessary measures to combat "mass numbers of people to come in and fentanyl to come in," The Times reported, citing these concerns as the basis for invoking the International Emergency Economic Powers Act.
Economic experts are already warning about potential consequences. Felix Tintelnot, associate professor of economics at Duke University, told the paper that while price increases might not be immediate for all products, "if these tariffs are there to stay, then these price increases are going to come eventually."
Consumers could see rapid price increases for perishable goods imported from Mexico, such as avocados, cucumbers, and tomatoes, potentially within weeks. According to the US outlet, durable goods like automobiles might experience a delayed price effect due to existing inventory or if companies expect the tariffs to be temporary.
The auto and electric equipment sectors in Mexico are most vulnerable to disruption from these sweeping tariffs, as is mineral processing in Canada, according to economists at S&P Global. Within the United States, farming, fishing, metal production, and automobile manufacturing face the greatest risks.
Energy prices also stand to be affected, as roughly 60% of oil imported to the United States comes from Canada. The paper reported that tariffs on Canadian energy, though lower than other imports at 10%, could lead to higher prices at gas pumps, particularly in the US Midwest, where refineries process Canadian oil into gasoline and diesel.
Inflation concerns loom large in economic forecasts. Analysts at Goldman Sachs have warned that across-the-board tariffs would not only raise prices but also slow economic growth, the Times noted. Peter Simon, economics professor at Northeastern University, told the NYT that an uptick in inflation is an "unavoidable result" of the tariffs, while also cautioning about the risk of "opportunistic pricing" – companies using tariffs as justification to raise prices more than necessary.
When President Trump previously imposed tariffs on China during his first term, economic studies found that most costs were passed on to American consumers – a scenario likely to repeat itself. This could mean higher prices across multiple sectors, from grocery stores to car dealerships to gas stations.
Transportation data showed modest increases in freight volumes on road and rail in the weeks before Trump's executive orders, though experts noted the situation differed from the supply chain crisis of 2021-2022, when shipping costs skyrocketed and contributed significantly to inflation.
As businesses and consumers brace for the economic impact of these new trade measures, the administration's approach represents a return to the trade policy stance that characterized Trump's first term, though potentially on a broader scale given the comprehensive nature of these latest tariffs.
