US President Donald Trump confirmed plans to impose 25% tariffs on Canadian and Mexican imports starting 1 February. However, he said no final decision had been made on whether this would include oil from those nations.
In the Oval Office, Trump cited concerns about undocumented migrants, fentanyl crossing US borders, and trade deficits. He claimed these issues necessitated the tariffs.
China Tariffs Still on Trump’s Agenda
Trump also reiterated plans to impose new tariffs on China. He previously mentioned a 10% tariff earlier this month but withheld specific details.
“China is sending fentanyl into our country, and that’s leading to hundreds of thousands of deaths,” Trump said. “As a result, they’ll face tariffs too, and we’re already working on it.”
During his election campaign, Trump threatened to impose tariffs of up to 60% on Chinese goods. However, on his first day back in office, he delayed immediate action, instead directing his administration to investigate.
Since 2018, US imports of Chinese goods have stagnated. Economists link this partly to the escalating tariffs imposed during Trump’s first term.
Global Responses and Calls for Compromise
In response, Chinese officials emphasized a “win-win” approach to managing trade conflicts. Vice Premier Ding Xuexiang recently said China hopes to expand imports and avoid worsening tensions. His statement at the World Economic Forum in Davos, Switzerland, did not name the US directly.
Meanwhile, Canada and Mexico pledged retaliatory measures if US tariffs take effect. They also reassured the US that they are addressing concerns about their borders.
If Trump applies tariffs on oil imports, it may contradict his pledge to lower living costs. Tariffs, essentially a tax on imported goods, aim to make foreign products more expensive. The goal is to encourage people to buy cheaper domestic alternatives, thus supporting the national economy.
However, this policy carries risks. Businesses and consumers could face higher costs if tariffs are imposed on imported energy. Prices on items like gasoline and groceries may rise as companies pass the added expenses to consumers.
Around 40% of crude oil used in US refineries is imported, with most of it originating from Canada. Any disruption could have significant economic consequences. As the news of potential tariffs unfolds, global markets and policymakers remain on edge, anticipating the economic impact and possible trade retaliation.
