Canadian Prime Minister Justin Trudeau retaliated and announced that Canada will match the US tariffs, at a rate of 25%. Trudeau has also said he is considering non-tariff measures, including “some relating to critical minerals, energy, procurement, and other partnerships.”
Mexican President Claudia Sheinbaum has also vowed retaliatory tariffs, but Mexico is far more export dependent than the US. Mexico received $63 billion in remittances in 2023, mostly from the US. Mexico is likely to capitulate.
UPDATE: In exchange for pausing the tariff on Mexico for one month, Sheinbaum agreed to reinforce the US-Mexico border with 10,000 personnel from her country’s National Guard, to help crack down on fentanyl dissemination and illegal immigration into the US
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President Donald Trump has officially imposed tariffs on Canada, Mexico and China.
Using the International Emergency Economic Powers Act, President Trump imposed 25% tariffs on all Mexican imports; 25% tariffs on all Canadian imports, except energy, which will be subject to a lower rate of 10%; and 10% on all Chinese imports.
President Trump took to Truth Social to announce the measures.
“Today, I have implemented a 25% Tariff on Imports from Mexico and Canada (10% on Canadian Energy), and a 10% additional Tariff on China. This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl. We need to protect Americans, and it is my duty as President to ensure the safety of all. I made a promise on my Campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it,” President Trump posted.
It’s unclear at present when the tariffs will come into effect. Reports suggest Tuesday.
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The Canadian government has promised to impose retaliatory tariffs on US goods.
Mexico’s President Claims She Has ‘Plan A, Plan B, Plan C’ in Response to Trump Tariffs
Only a few days ago the president of Mexico, Claudia Sheinbaum, was questioning with some skepticism whether or not Donald Trump would actually follow through on his threats of 25% tariffs on most Mexican-made goods. “We don’t think it’s going to happen,” Sheinbaum said at her regular morning press conference. “And if it does happen, we also have our plan.”
As of the 1st of February it appears that her doubts have been put to rest. Donald Trump has reiterated that he is going to stick to his tariff plan and that it will not be incremental. Around 80% of all Mexican exports go to the US, which means that the majority of their manufacturing base will be immediately hit with a drop in US retail demand. Mexican business leaders say this will trigger a number of bankruptcies and higher unemployment in border cities.
Sheinbam claims in a recent press conference that she has a ‘Plan A, Plan B and Plan C’ in the face of high tariffs, but what does she really mean? What would Mexico’s response be, specifically?
First and foremost, Sheinbaum has threatened retaliatory tariffs on US exports to Mexico, her “Plan A”. Around 15% of US exports end up south of the border, however, Mexico is far more export dependent than the US. Only 10% of the US economy is based on exports while 43% of Mexico’s economy relies on exports according to the World Bank. In other words, tariffs will hurt them a lot more than they’ll hurt America.
Like most establishment media economists, Mexico also argues that the US consumer will have to eat the inflation in prices that comes with tariffs. This is assuming, though, that there are no alternatives to the Mexican goods being imported. Car parts, electrical equipment, oil and gas, fruits and vegetables are a few of the biggest markets for Mexican goods. The US produces close to 90% of the food that Americans purchase and Trump has indicated that energy may be exempt from tariffs.
The Mexican President’s Plan B and Plan C are not so clear. It is likely that Sheinbaum will seek aid from other Latin American governments, either to establish economic agreements to help lessen the pain of US tariffs, or as a means to put pressure on Trump through organized geopolitical sparring. Most of these countries also have favorable trade imbalances with the US and none of them hold much international weight.
The real leverage that Mexico has in harming the US is through mass immigration, which siphons hundreds of billions in taxpayer dollars, untold billions in untaxed wages, untold billions in subsidies, hundreds of millions in foreign aid each year that’s meant to stop immigration – The list goes on and on. Then there’s the inflation in housing and goods caused by the extra demand of tens-of-millions of illegals, along with the wage depletion caused by foreign workers taking around 30% less pay than the average American worker.
Of course, Mexico has already been allowing illegal immigrants to flood into the US for decades, so it’s not much of a threat anymore.
Mexico’s response to Trump’s tariffs will be to capitulate, the only question is how long will it take them to realize that this is their only option.
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As a Canadian, I can say that Justin Trudeau never lives up to his obligations. Therefor he deserves all that is thrown at him.