Trump -Tariffs on Mexico, Canada and China come into effect Saturday: live updates

Mrs. Leavitt said the president had chosen to impose tariffs on customs because the three countries “all have made it possible for illegal drugs to pour in America.”

“The amount of fentanyl that has been seized at the southern border in the last few years alone has the potential to kill tens of thousands of millions of Americans,” she said. “And then the president intends to do this.”

The tariffs are likely to initiate the kind of disturbing trade war seen in Mr. Trump’s first period, but on a much larger scale.

Mexico, China and Canada account for more than a third of the goods and services imported to or bought from the United States supporting tens of thousands of millions of US jobs.

All three governments have promised to answer Mr. Trump’s charges with their own tariffs on US exports, including Florida orange juice, Tennessee Whiskey and Kentucky Peanut Butter.

The tariffs immediately raise the cost of the importers who bring products across the border. During the detailed period, it may interfere with supply chains and lead to product deficiency if importers choose not to pay the cost of the tariff. And in the long run, companies can choose to pass on the cost of US consumers, raise prices and slow the economy.

Trump’s desire to hit allies and competitors both with duties over issues that have suffered to do with trade, shows the president’s willingness to use a powerful financial tool to fulfill his domestic political agenda, especially his focus on illegal immigration.

“Hope Trump’s tariff threats were merely bluster, and a negotiating tool is now crumbling under the harsh reality of his determination to insert tariffs as a tool to change other countries policies to his liking,” said Eswar Prasad, a trade policy professor at Cornell University .

Mr. Trump said in November he would put a 25 percent duty on Canada and Mexico and 10 percent on China, in an attempt to stop the flow of migrants and drugs, especially Fentanyl, into the United States.

The threat set a crib from Canadian and Mexican officials trying to persuade the administration to hold on to duty by participating in the last -minute negotiations with State Secretary Marco Rubio and detailed the efforts they did to the police in the border.

Auto and energy companies have also pushed the White House and the administration hard not to use tariffs.

Mr. Trump’s advisers have weighed various scenarios, such as tariffs that would apply to specific sectors, such as steel and aluminum, or taxes that would be announced but do not come into force for several months, according to people who are aware of the planning.

President Claudia Sheinbaum of Mexico told journalists on Friday that the Mexican government had been working for months on a plan to respond to possible tariffs. “We are prepared for any scenario,” she said before Ms. Leavitt’s briefing and added that Mexico “did everything in our power” to prevent customs. “What do we want? This dialogue with respect is prevalent. “

Prime Minister Justin Trudeau of Canada repeated on Friday before the briefing that his government still did not know if the tariffs would be in place on Saturday and what they would just cover.

“If the president chooses to implement any customs against Canada, we are ready with an answer – a targeted, powerful but reasonable, immediate reaction,” Mr. Trudeau to journalists. “That’s not what we want. But if he moves forward, we will act too. “

At both limits, the number of illegal crossings has dropped sharply.

The number of unauthorized crossings at the southern border in December 2023 reached nearly 250,000, overwhelming border patrol and caused the government to close an entrance port. At the northern border, the flow of migrants crossed illegally in the financial year 2024. During this time, more than 23,000 arrests were made by migrants crossing illegally – two years before that figure was around 2,000.

The situation at the border has changed since then.

In December, agents made approximately 47,000 arrests at the southern border and 510 at the northern border.

In a speech from the Oval Office on Thursday, Mr. Trump that he was ready to cut off the imports of Canada and Mexico, two of America’s closest allies.

“We advertise customs duties in Canada and Mexico for several reasons,” he said. “I want to put the 25 percent duty on Canada and a separate 25 percent on Mexico, and we really have to do it.”

“We don’t need what they have,” Mr. Trump. He added that tariffs could rise over time and suggested that customs may not apply to oil imports, a decision that could avoid an increase in gas prices.

While the United States is the world’s largest oil producer, refineries have to mix the lighter crude oil produced in domestic fields with heavier oil from places like Canada to produce fuels such as gasoline and diesel. About 60 percent of the oil that the United States imports comes from Canada, and approx. 7 percent come from Mexico.

According to Tom Kloza, the global head of energy analysis at oil price information, whose fuel producers respond to tariffs by cutting down on production, gasoline prices in the Midwest could climb 15 to 20 cents per year. Gallon, with more muted effects in other parts of the country.

The potential financial consequences of tariffs also complicate cases for Federal Reserve, which is still trying to fight inflation down to its 2 percent target. Fed this week, interest rates kept stable, after a series of cuts, in the midst of persistent inflation and questions about how tariffs would play out.

The financial fall from the tariffs depends on how they were structured, but the ring effects could be wide. Canada, Mexico and the United States have been governed by a trade agreement for more than 30 years, and many industries, from cars and clothing to agriculture, have grown very integrated in North America.

Mary Lovely, a senior fellow at the Peterson Institute for International Economics, said the customs would be “very expensive” for US companies.

American factories depend on input from both countries, including minerals and wood from Canada and car parts from Mexico. The tariffs would also go against efforts that US companies have done in recent years to move out of China, calling the Trump and Biden administrations.

According to Economists at S&P Global, car and electrical equipment sectors in Mexico would be most prone to disturbance if duties were adopted, just as mineral processing in Canada. In the United States, the biggest risks would be to agriculture, fishing, metals and car sectors.

Mr. Trump has highlighted the ability of the tariff to protect domestic producers. But in balance, most economists expect fresh trading barriers to raise prices for US companies and households, which can lead to a temporary outbreak of higher inflation. Whether it escalates to a more harmful problem depends on whether American expectations of future inflation begin to change higher in a meaningful way.

Over time, economists also worry about the effects on growth and warn that merchant stresses are likely to lead to less investment, more muted business activity and slower growth.

Ernie Tedeschi, Director of Economics at Yale Budget Lab, estimates that a 25 percent duty on all Canadian and Mexican imported goods – paired with a 10 percent duty on all Chinese import – would lead to a permanent 0.8 percent shock at the price level, measured by the price index for personal consumption expenses. This means an average of approx. $ 1,300 for households. These estimates assume that the targeted countries are adopting retaliatory measures and that the Federal Reserve does not intervene by adjusting interest rates.

Mr. Tedeschi expects this to eventually shave a 0.2 percent discount on gross domestic product when inflation is taken into account.

Mr. Trump’s top financial advisers have rejected the idea that customs would burn inflation. In the press labeled, Mrs. Leavitt said inflation had been muted in Mr. Trump’s first period, despite the fact that tariffs were imposed. And she said the president made other policies that would lower inflation, such as adopting tax cuts and encouraging energy production.

On his confirmation of the consultation this month, Treasury Secretary Scott Bessent rejected concerns from the Democrats about Mr. Trump’s trade policy, suggesting that exporters from countries like China would lower their prices in light of higher US tariffs. Mr. Bessent said last year that it would be cautious if any tariffs were phased in, so any associated “price adjustment” could be gradually admitted by the economy.

Trump’s election to be trade secretary, Howard Lutnick, also embraced tariffs at his confirmation hearing and pushed back to the notion that they would burn inflation. He suggested that Canada and Mexico could possibly avoid the tariffs that Mr. Trump was dangling if they closed their limits to Fentanyl.

Mr. Lutnick stated that he believed that “everywhere” tariffs in countries would be most effective, arguing that China should face the highest rates and that Europe, Japan and South Korea also treated US industries unfair.

“We need respect to end, and I think tariffs are a way of creating reciprocity, to be treated fairly, to be treated properly,” Mr. Lutnick.

Hamed aleazizAt Vjosa Isai and Emiliano Rodríguez Mega contributed with reporting.