Proposed tariffs on China, Canada, and Mexico will go into effect on March 4, President Donald Trump has confirmed on social media platform Truth Social.
The president also announced an additional 10 percent levy on Chinese goods entering the country. This will be on top of the 10 percent levy imposed on China on Feb. 4.
Illicit drugs “are still pouring into our country from Mexico and Canada at very high and unacceptable levels,” Trump wrote on Feb. 27.
“We cannot allow this scourge [of illicit drugs] to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” the president wrote.
“China will likewise be charged an additional 10% Tariff on that date.”
Additionally, he confirmed that reciprocal tariffs “will remain in full force and effect” in April.
The United States imported $439 billion in goods from China last year, up from $427 billion in 2023. In recent years, China’s share of goods coming into the United States has tumbled, declining from 21.6 percent of total U.S. imports in 2018 to 13.4 percent in 2024.
The United States also imported $413 billion in goods from Canada and more than $500 billion in goods from Mexico in 2024.
Earlier this month, Canada and Mexico secured a 30-day pause on tariffs as the two U.S. neighbors pledged to bolster their border policies to help curb the flow of drugs and reduce the number of illegal immigrants entering the country.
“The fentanyl-related things, if they’re working hard on the border, at the end of that 30 days, they have to prove to the president that they’ve satisfied him to that regard,” Commerce Secretary Howard Lutnick said as the president hosted the first Cabinet meeting of his second term on Feb. 26.
Trump clarified that it was “going to be hard to satisfy.”
He also informed reporters that he is considering 25 percent tariffs on the European Union, focusing “on cars and all other things,” because the United States is mistreated in global trade.
Trump suggested the European Union was formed to take advantage of the United States.
“That’s the purpose of it, and they’ve done a good job of it. But now I’m president,” Trump said.
European leaders, including Polish Prime Minister Donald Tusk, disagreed.
Since Inauguration Day, the president has suggested various sweeping trade policies that would apply sizable levies to U.S. trading partners.
Assessing the Tariff Situation
The White House’s “America First” trade agenda has sparked concerns among economists and financial markets that the efforts could revive cost pressures and slow growth.According to Tax Foundation economists, imposing these tariffs on Canada, Mexico, and China would reduce long-term GDP by 0.4 percent.
Uncertainty surrounding the inflation outlook amid increased tariffs has economic observers debating whether the president’s levies will have a negligible or sizable impact on prices.
“If the tariffs are one big step change, then the Fed may choose to look through it and focus on the potential hit to spending power in the knowledge that the base effect will likely drop out next year,” James Knightley, chief international economist at ING, wrote in a Feb. 27 note.
“However, if it is incremental ratcheting up over time then that is likely to be more bearable for the economy and the Fed sees it more as a structural story that keeps it from cutting rates.”
Former Commerce Secretary Wilbur Ross has expressed doubt that these tariffs will raise inflation risks, alluding to the first Trump administration’s policies that had little effect on consumer prices.
“Inflation, in fact, was very low during the Trump administration,” Ross told The Epoch Times.
He outlined several reasons for the lack of high inflation during the initial round of tariffs.
Exporting countries like China tend “to eat part of the increase in operating costs,” Ross said.
U.S. companies that import goods typically “can afford to absorb part” of the higher costs, he said, which was observed in the inflation data.
In 2018 and part of 2019, the producer price index—a gauge of prices paid for goods and services by businesses—surged. However, the consumer price index barely budged during this period, sliding to as low as 1.5 percent.
Moreover, commodity products like steel and aluminum are highly volatile in the broader market over a year, Ross said, “even without any tariffs.”
“It’s hard to say that the tariffs are particularly damaging because those commodities tariffs are much more complicated,” he said.
While imports from China are significantly down from previous years, Federal Reserve Bank of New York economists say the decrease is much less than reported in the official data.
Market Reaction
U.S. stocks shrugged off Trump’s latest clarification of his tariff plans.After the news, the blue-chip Dow Jones Industrial Average rallied as much as 400 points. The S&P 500 and the tech-heavy Nasdaq Composite Index were little changed.
Financial markets have endured massive price swings this month. The Dow Jones recently experienced its worst session of the year so far, but the S&P 500 registered a new high in February.
“Market uncertainty is rising due to rapid policy changes from the new administration,” Mark Malek, chief investment officer at Siebert Financial, said in a note emailed to The Epoch Times.
“The stock market doesn’t have feelings—people do. And right now, people are nervous.”
