By Aliyu Galadima
President Donald Trump’s 25% tariffs on imports from Mexico and Canada officially took effect yesterday, March 4, 2025.
The move, which Trump said was in response to the unacceptable flow of illegal drugs and illegal immigrants into the U.S., could destabilise the North American economy.
Similarly, Trump doubled tariffs on all Chinese imports, raising them from 10% to 20%. These new duties add to the existing tariffs already in place on hundreds of billions of dollars worth of Chinese goods.
In a statement released just before the tariffs took effect, the White House said the measures are due to Mexico and Canada’s alleged failure to curb cartel activities and the flow of illegal drugs into the US.
The new tariffs, which come at a time when inflation remains a pressing concern in the U.S., are expected to drive up prices on a wide range of goods imported from Mexico, Canada, and China.
The three nations accounted for over 40% of all U.S. imports last year, totalling $1.4trn, according to the Commerce Department.
Among the most affected goods are fresh produce, automobiles, auto parts, and electronics, including smartphones and computers, all of which will now face tariffs between 20% and 25%. One exception is Canadian crude oil and other energy-related products, which will be subject to a lower 10% tariff.
In a swift response, China imposed 15% tariffs on American chicken, wheat, corn, and cotton, according to a statement from the State Council Tariff Commission.
Additionally, a 10% tariff was applied to a range of US agricultural exports, including sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products.
China’s Ministry of Commerce also announced that it had blacklisted 15 American companies, including drone manufacturer Skydio, restricting Chinese firms from exporting dual-use equipment to them.
Canada also responded, with Prime Minister Justin Trudeau announcing retaliatory tariffs on $30bn worth of U.S. goods along with plans to impose an additional $125bn in tariffs by March 25.
“Canada will not let this unjustified decision go unanswered”, Trudeau said in a statement.
Despite Trump’s claims that foreign exporters bear the cost of tariffs, U.S. importers and businesses often pay them upfront.
The costs are typically passed on to consumers in the form of higher prices, though some companies may be forced to absorb them, thereby impacting their profitability.
Trump’s trade war appears far from over. Steel and aluminium tariffs are set to take effect on March 12, while “reciprocal tariffs”, which would match foreign tariffs dollar-for-dollar, are scheduled for April 2.
The administration is also considering new tariffs on Canadian lumber, which could further drive up housing prices—a key contributor to inflation. Additionally, Trump has hinted at imposing tariffs on agricultural imports, with potential implementation as early as April 2.
