On Friday, companies, consumers, and farmers throughout North America prepared for U.S. President Donald Trump's potential imposition of 25% tariffs on Canadian and Mexican imports, a move that could disrupt nearly $1.6 trillion in annual trade.
Trump's deadline for imposing these tariffs, set for Saturday, is tied to his demands for Canada and Mexico to take stronger action against illegal immigration, opioid trafficking, and precursor chemicals entering the U.S.
Concerns are mounting among industry groups about the implementation details of the tariffs. There are speculations on whether the tariffs would be immediately enforced at the full 25% rate or if there would be a delay to allow negotiation time.
Trump's considerations also include an additional 10% tariff on Chinese imports as a measure to penalize Beijing. The imposition of duties would mark a significant departure from the long-standing free trade system that has fostered a deeply integrated North American economy.
Economists and business leaders warn that these tariffs would lead to price hikes for various imports like aluminum, lumber, produce, electronics, and vehicles.
Tariffs generally get passed on to consumers through higher prices, leading to negative impacts on both sides of the border. Matthew Holmes of the Canadian Chamber of Commerce highlighted the cascading effects of tariffs, calling it a "lose-lose" situation.
Canada and Mexico are preparing retaliatory measures against the potential tariffs, emphasizing that they are ready to act if necessary. Mexican President Claudia Sheinbaum expressed skepticism about the actual implementation of the tariffs, however, stressing that Mexico is prepared to retaliate if needed.
China has expressed hopes for continued cooperation with the U.S. on issues like fentanyl trafficking, but emphasized that its goodwill should not be taken for granted.
Trade group insiders suggest that the tariffs might be announced but ultimately suspended due to apparent progress in addressing fentanyl and immigration concerns. However, they caution that Trump must follow through on his threats to maintain credibility.