The Trump Administration plans to move forward with rigid prices imposing in Mexico, Canada and China on Saturday, in an attempt to put pressure on the largest American trade partners to accept the deportees and stop the flow of migrants and drugs in the country.
Friday, in a press briefing, the press secretary of the White House, Karoline Leavitt, said that the president would set up a 25% rate on Mexico goods, a 25% price on the goods of Canada and A 10% tariff on goods from China.
Ms. Leavitt said that the president had chosen to impose prices because the three countries “all allowed illegal drugs to pay in America”.
“The quantity of fentanyl that has been seized on the southern border in recent years only has the potential to kill tens of millions of Americans,” she said. “And therefore the president intends to do so.”
The prices are likely to initiate the type of disturbing trade wars observed in Mr. Trump’s first mandate, but on a much larger scale.
Mexico, China and Canada represent more than a third of the goods and services imported or bought in the United States, supporting tens of millions of American jobs.
The three governments promised to respond to Mr. Trump’s samples with prices that have their own American exports, including Florida orange juice, Tennessee whiskey and Kentucky peanut butter.
The prices will immediately increase costs for importers who provide products across the border. Closer, this could disrupt supply chains and cause products shortages, if importers choose not to pay the cost of the price. And in the longer term, companies can choose to transmit cost to American consumers, increase prices and slow down the economy.
Mr. Trump’s desire to strike allies and competitors with prices on questions that have little to do with trade shows the president’s desire to use a powerful economic tool to carry out his interior policy program, in particular his accent on illegal immigration.
“Hopefully Trump’s pricing threats were only boastful and that a negotiation tool is now collapsing under the harsh reality of its determination to deploy prices as a tool to move policies from other countries to its liking “Said Eswar Prasad, professor of commercial policy at Cornell in Cornell at Cornell University.
Trump said in November that he would put 25% prices in Canada and Mexico and 10% on China, in order to stop the flow of migrants and drugs, in particular fentanyl, in states -Unis.
The threat launched a race by Canadian and Mexican officials, who tried to persuade the administration to hold the prices by engaging in last -minute interviews with Secretary of State Marco Rubio and detailing the efforts they were making To control the border.
Automobile and energy companies have also pushed the White House and the administration that is difficult to apply.
Mr. Trump’s advisers weighed different scenarios, such as prices that would apply to specific sectors, such as steel and aluminum, or samples that are announced but do not enter into force for several months, according to People familiar with planning.
President Claudia Sheinbaum of Mexico told journalists on Friday that the Mexican government has been working for months on a plan to react to the possible prices. “We are ready for any scenario,” she said, adding that Mexico “did everything in our power” to prevent prices. “What do we want?” This dialogue with respect prevails. »»
Prime Minister Justin Trudeau from Canada reiterated on Friday that his government still did not know if the prices would be set up on Saturday and what they would cover precisely.
“If the president chooses to implement prices against Canada, we are ready with an answer – an immediate and reasonable but reasonable response,” Trudeau told journalists. “This is not what we want. But if he advances, we will also act. »»
On both borders, the number of illegal passages has dropped sharply.
The number of unauthorized passages on the southern border in December 2023 reached nearly 250,000, crushing the border patrol and causing the closure of an entrance port. At the northern border, the flow of migrants was illegally crossed in the year 2024. Meanwhile, more than 23,000 arrests were made on migrants crossing illegally – two years before this figure is around 2 000.
The border situation has changed since then.
In December, the agents carried out around 47,000 arrests on the southern border and 510 on the northern border.
Speaking Thursday at the Oval Office, Trump suggested that he was ready to cut imports from Canada and Mexico, two of the nearest American allies.
“We will announce prices in Canada and Mexico for several reasons,” he said. “I will put the 25% price in Canada, and separately, 25% on Mexico, and we will really have to do it.”
“We don’t need what they have,” said Trump. He added that price rates could increase over time and suggest that prices may not apply to oil imports, a decision that could avoid an increase in gas prices.
While the United States is the largest petroleum producer in the world, refineries must mix the lighter gross produced in domestic fields with heavier oils like Canada to make fuels like petrol and diesel . About 60% of oil that the United States imports from Canada, and about 7% come from Mexico.
According to Tom Kloza, the global energy analysis manager at the information on oil prices, if fuel producers react to prices by reducing production, petrol prices in the Midwest could climb From 15 to 20 cents the gallon, with more silent effects in other parts of the country.
The potential economic implications of prices also complicate questions for the federal reserve, which always tries to combat inflation to its target of 2%. The Fed this week had stable interest rates, after a series of reductions, in the middle of persistent inflation and questions about how the prices would take place.
The economic benefits of the prices would depend on how they were structured, but the training effects could be wide. Canada, Mexico and the United States have been governed by a trade agreement for over 30 years, and many industries, cars and agricultural clothing has become highly integrated across North America.
Mary Lovely, a main person at the Peterson Institute for International Economics, said the prices would be “very expensive” for American companies.
American factories depend on contributions from the two countries, including minerals and Canada wood and Mexico automotive parts. The prices would also go against the efforts that US companies have made in recent years to leave China, at the request of Trump and Biden administrations.
According to economists from S&P Global, the automotive and electric equipment sectors in Mexico are the most exposed to disturbances if the prices were adopted, as is the treatment of minerals in Canada. In the United States, the most important risks would consist of agriculture, fishing, metals and automotive sectors.
Trump highlighted the capacity of prices to protect national manufacturers. But in balance, most economists expect new commercial barriers to increase the prices of American companies and households, which could lead to a temporary gust of higher inflation. The question of whether it degenerates into a more pernicious problem will depend on the question of whether the expectations of Americans concerning future inflation begin to change more significantly.
Over time, economists are also concerned about growth effects, warning that trade tensions are likely to drive less investments, more moderate commercial activity and slower growth.
Ernie Tedeschi, Director of the Yale Budget Economy LAB, estimates that a 25% rate on all Canadian and Mexican imported goods – associated with a 10% tariff on all Chinese imports – would lead to a permanent bump of 0 , 8% in the price level, as measured by the price index of personal consumer expenses. This results in about $ 1,300 for households on average. These estimates assume that targeted countries adopt reprisal measures and that the federal reserve does not act by adjusting interest rates.
Mr. Tedeschi expects that it can ultimately have a 0.2% reduction in the gross domestic product once inflation is taken into account.
Mr. Trump’s main economic advisers refuted the idea that prices would feed inflation. In the press briefing, Ms. Leavitt said that inflation had remained moderate during Mr. Trump’s first term, despite the prices imposed. And she said that the president had developed other policies that would reduce inflation, such as spending tax reductions and encouraging energy production.
During his confirmation hearing this month, the Treasury Secretary Scott Bessent rejected the concerns of Democrats concerning Mr. Trump’s trade policy, suggesting that country exporters like China would reduce their prices to the higher American prices . Bessent said last year that it would be careful if prices were progressive so that any associated “price adjustment” can be gradually absorbed by the economy.
Trump’s choice to be a trade secretary Howard Lunick also adopted prices during his confirmation audience and rejected the idea that they would feed inflation. He suggested that Canada and Mexico could avoid the prices that Trump hung if they closed their borders to fentanyl.
Mr. Lunick said he thought that prices “at all levels” on countries would be the most effective, arguing that China should face the highest rates and that Europe, Japan and Korea of the South also dealt with American industries.
“We need this lack of respect to finish, and I think that prices are a way to create a reciprocity, to be treated fairly, to be treated in an appropriate manner,” said Lunick.
Hamed Aleaziz,, Vjosa Isai And Emiliano Rodríguez Mega Contributed reports.
