Trump Confirms Tariffs on Mexico and Canada to Start Tuesday: Full Details Unveiled

By ardwatalab news desk | Published: March 3, 2025, 12:10 PM PST

WASHINGTON : President Donald Trump has officially confirmed that sweeping new tariffs on imports from Mexico and Canada will take effect this Tuesday, March 4, 2025, sending shockwaves through global markets and igniting debates over trade, inflation, and international relations. Alongside these measures, Trump announced an additional tariff hike on Chinese goods, intensifying his administration’s aggressive trade policy just weeks into his second term. Here’s everything you need to know about this seismic economic shift, its potential impacts, and what’s driving the decision.

Trump’s Tariff Announcement: The Breakdown

In a statement released late Sunday, President Trump confirmed that tariffs of 25% on all imports from Mexico and Canada (with a reduced 10% rate on Canadian energy products) will begin at 12:01 a.m. EST on Tuesday, March 4, 2025. Additionally, he plans to double the existing 10% tariff on Chinese imports to 20%, effective the same day. These measures, enacted under the authority of the International Emergency Economic Powers Act (IEEPA), mark one of the boldest trade moves in modern U.S. history.

Speaking via Truth Social, Trump justified the tariffs, stating, “Vast amounts of fentanyl and illegal immigrants have poured in from Mexico and Canada. These countries must act, or they’ll pay the price. China’s not off the hook either—fentanyl precursors are their game, and we’re doubling down.”

U.S. Commerce Secretary Howard Lutnick, in an interview with Fox News on Sunday, hinted at flexibility in the tariff levels, noting, “There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we’re leaving to the president and his team to negotiate. It’s a fluid situation.” Trump is expected to finalize the precise rates by Monday afternoon, with an official announcement to follow.

Why Now? The Fentanyl and Border Security Push

The tariffs are framed as a response to two pressing issues: drug trafficking and border security. Trump has repeatedly cited the flow of fentanyl—a deadly opioid responsible for tens of thousands of U.S. overdose deaths annually—as a primary motivator. He claims much of the drug enters via Mexico and Canada, often using precursor chemicals sourced from China.

“Mexico and Canada haven’t done enough on fentanyl,” Lutnick told CNN on Monday. “The president knows they’ve made progress on the border, but he’s weighing whether that’s enough.” Negotiations with both nations intensified over the past month after Trump granted a 30-day reprieve in early February, delaying an initial tariff threat. Despite efforts by Mexican President Claudia Sheinbaum and Canadian officials to bolster border enforcement, Trump appears unconvinced, opting to pull the trigger on his trade weapon.

Economic Impact: What to Expect

The tariffs target America’s two largest trading partners, with $840 billion in annual trade with Mexico and $762 billion with Canada, alongside $582 billion with China. Economists warn of far-reaching consequences:

• Inflation Surge: Experts predict price hikes on everyday goods like avocados, autos, oil, and gasoline. Kelley Blue Book estimates the average U.S. new car price—already nearing $49,000—could rise by $3,000 or more due to disrupted North American supply chains.

• Auto Industry Chaos: Canada and Mexico supply critical components like engines and car seats for U.S.-assembled vehicles. A 25% tariff could “throw a grenade” into this integrated network, warns Scott Lincicome of the Cato Institute.

• Consumer Confidence Dip: The Conference Board reported a 7-point drop in its consumer confidence index to 98.3 last Tuesday, partly attributed to tariff fears.

• Retaliation Risks: Canada and Mexico may impose counter-tariffs on U.S. exports like soybeans and corn, echoing retaliatory moves from Trump’s first term that hit rural America hard.

EY-Parthenon chief economist Gregory Daco cautioned, “If pushed to their extreme, these tariffs could even trigger a recession.” Markets reacted with volatility Monday morning, with the Canadian dollar and Mexican peso seesawing as investors braced for the fallout.

Global Reactions: Allies Scramble, China Prepares

• Mexico: President Sheinbaum remained defiant yet composed in a Monday press conference, stating, “We’re calm, but we have a plan B, C, D if tariffs hit.” Mexico has already imposed its own tariffs on Chinese imports to align with U.S. interests, hoping to soften Trump’s stance.

• Canada: Officials have lobbied Washington relentlessly, emphasizing their efforts to curb drug smuggling. Treasury Secretary Scott Bessent urged Canada to match U.S. tariffs on China, signaling a potential offramp from the full 25% rate.

• China: With its annual parliamentary meetings starting Wednesday, Beijing faces a tight window to respond. State-backed Global Times reported China may retaliate with tariffs on U.S. agricultural goods, escalating the trade war.

Expert Opinions: A Divided Debate

• Pro-Tariff: Kevin Hassett, former White House National Economic Council director, argues, “These tariffs force accountability. Mexico and Canada need to step up on fentanyl, and China’s been dodging responsibility for too long.”

• Anti-Tariff: Trade expert William Reinsch of the Center for Strategic and International Studies counters, “This is a sledgehammer approach to a problem needing a scalpel. The economic collateral damage will outweigh any gains.”