Trump’s Tariff Plan: What You Need to Know
In a move that’s set to impact the US’s trade relationships with its two largest trading partners, President Donald Trump has announced plans to impose 25% tariffs on imports from Canada and Mexico. The tariffs, which are scheduled to take effect on Saturday, are aimed at addressing several key issues, including the flow of drugs and migrants into the US, as well as the trade deficits the US holds with these countries ¹.
The Reasons Behind the Tariffs
According to Trump, the tariffs are necessary to address three main issues. Firstly, the US is concerned about the large number of migrants entering the country through its borders with Canada and Mexico. Secondly, the US is seeking to stem the flow of drugs, including fentanyl, into the country. Finally, the US is looking to address the trade deficits it holds with Canada and Mexico, which Trump describes as “massive subsidies” .
A Possible Exemption for Oil Imports
While the tariffs are set to be imposed on a wide range of goods, there’s a possibility that oil imports from Canada and Mexico may be exempt. According to Trump, this decision will depend on whether these countries “treat us properly” and “if the oil is properly priced” .
A Long-Standing Promise
Trump’s plan to impose tariffs on Canada and Mexico is not a new development. In fact, he promised to do so on his first day in office, although he later pushed back the deadline to February .
Reactions from Canada and Mexico
So far, there’s been no official comment from the Canadian Prime Minister’s office or the Mexican economy ministry. However, it’s likely that both countries will be closely watching the situation and considering their next steps ¹.
What’s Next?
As the situation unfolds, it’s clear that Trump’s tariff plan has the potential to significantly impact trade relationships between the US, Canada, and Mexico. We’ll be keeping a close eye on developments and providing updates as more information becomes available.
Trump Set to Impose 25% Import Tariffs on Mexico, Canada Saturday
By Nisha Gopalan
Nisha Gopalan
Full Bio
Nisha Gopalan is the Senior Overnight Assignment Editor for Investopedia News. She is an award-winning financial journalist who has worked in London, where she is currently based, and Hong Kong. She previously worked at The Wall Street Journal and Bloomberg.
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Published January 31, 2025 06:03 AM EST
U.S. President Donald Trump speaks about the mid-air crash
Chen Mengtong / China News Service / VCG via Getty Images
KEY TAKEAWAYS
President Donald Trump said he would go ahead with plans to impose 25% tariffs on imports from the U.S.’s two largest trading partners, Canada and Mexico, on Saturday.
Trump said Thursday that the tariffs are aimed at getting Ottawa and Mexico City to stem the flow of drugs and migrants into the U.S., and address the deficits it holds with those countries.
However, Trump said the U.S. may not impose tariffs on oil imports from the two countries.
President Donald Trump said he would go ahead with plans to impose 25% tariffs on imports from the U.S.’s two largest trading partners, Canada and Mexico, on Saturday.
Trump said Thursday that the tariffs are aimed at getting Ottawa and Mexico City to stem the flow of drugs and migrants into the U.S., and address the deficits the U.S. holds with those countries.
“We’ll be announcing the tariffs on Canada and Mexico for a number of reasons,” Trump said.
“Number one is the people that have poured into our country so horribly and so much. Number two are the drugs, fentanyl and everything else that have come into the country. And number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits.”Trump Says US May Not Impose Oil Tariffs
However, Trump said the U.S. may not impose tariffs on oil imports from the two countries, depending on if Canada and Mexico “treat us properly” and “if the oil is properly priced,” according to CNBC.
Trump promised to impose 25% tariffs on goods from Canada and Mexico on the first day of his presidency, though he held off and later said they would be imposed on Feb. .Do you have a news tip for Investopedia reporters? Please email us at
tips@investopedia.com
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