President Donald Trump’s tariffs policy officially kicked off on Feb. 3, with the second-term leader looking to make good on campaign promises to tax the United States’ northern and southern neighbors.
Trump and administration officials have long reiterated that the tariffs at play are about illegal immigration and drugs, namely fentanyl.
On Feb. 1, Trump signed an order that implemented a 25% tariff on imports from Canada and Mexico and a 10% tariff on imports from China. Canadian energy imports will be taxed at 10%.
Those three nations represent the U.S.’ three largest trading partners.
Expectedly, Canada and Mexico responded with threats of retaliatory tariff measures that would likewise begin Tuesday, with Canada prepared to impose 25% tariffs on U.S. goods in response. Meanwhile, the Chinese Commerce Ministry threatened a lawsuit with the World Trade Organization amid countermeasures.
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The situation is sure to remain fluid, evidenced by new developments on Feb. 3.
That morning, Trump said the U.S. has paused new tariffs on Mexico for one month following Mexico’s agreement to reinforce its northern border with 10,000 National Guard troops to curtail the flow of illegal drugs and a U.S. commitment to prevent trafficking of high-powered weapons to Mexico.
Mexico President Claudia Sheinbaum confirmed the deal on X Monday morning, just hours before the tariffs were set to take hold. On his social media platform, Truth Social, Trump said the U.S. and Mexico will engage in further negotiations during the month-long suspension.
Trump also spoke with Canadian Prime Minister Justin Trudeau on Feb. 3, and later that day, both sides announced that Trump likewise suspended tariffs on Canada for 30 days in return for higher enforcement against illegal immigration and drug smuggling. Trudeau had blasted Trump’s tariffs policies in the days prior.
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That leaves China’s 10% levy as the only new tariff in place as of the end of Feb. 3
Trade Groups Respond
In the days leading up to the tariffs’ launch, various industrial trade organizations issued statements responding to the looming impacts these import taxes will have on the business climate and the uncertainty and confusion they are likely to bring to supply chains as to how to respond. Ultimately, the statements and letters to Trump and Trudeau call for swift and fair resolution.
National Association of Manufacturers President and CEO Jay Timmons – Feb. 1:
“With essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses — employing millions of American workers — will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
Associated Equipment Distributors, to President Trump – Jan. 31:
“We look forward to working with you to implement your American First agenda, including making permanent the Tax Cuts & Jobs Act, unleashing domestic energy production, and regulatory reform. However, the equipment sector is by nature, an international industry, and there’s no stronger bond than that between the United States and Canada. Consequently, we encourage you to reconsider placing tariffs on imported goods from Canada. The United States and Canadian economies are closely integrated and indiscriminate tariffs on all Canadian imports would have harmful repercussions for U.S. consumers and companies. Expected retaliatory measures would further exacerbate the situation.”
AED penned a similar letter to Trudeau.
National Association of Home Builders – Feb. 1:
“On President Trump’s first day in office, he issued an executive order directing departments and agencies to deliver emergency price relief by pursuing actions to lower the cost of housing and increase housing supply. This move to raise tariffs by 25% on Canadian and Mexican goods will have the opposite effect. More than 70% of the imports of two essential materials that home builders rely on—softwood lumber and gypsum (used for drywall)—come from Canada and Mexico, respectively.
“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices. NAHB urges the administration to reconsider this action on tariffs and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production.”
A day earlier, the NAHB urged Trump to exempt building materials from the proposed tariffs.
American Building Materials Alliance – Jan. 31:
“We write to formally request an exemption from the newly proposed 25% tariff on Canadian lumber imports, which, when combined with the existing 15% tariff, will result in a 40% total tariff on Canadian lumber. This measure will not achieve its intended goal of increasing demand for American lumber in the Northeast. Instead, it will significantly raise construction costs while leaving no viable domestic alternative for builders. “
National Retail Federation – Feb. 1:
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America. But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
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