American industries, interest groups, and consumers are bracing for the effects of new tariffs the Trump administration imposed Saturday on three key trading partners.
President Donald Trump announced “a 25% additional tariff on imports from Canada and Mexico as well as a 10% additional tariff on imports from China” to address the “national emergency” of illegal immigration and transnational drug trafficking. “Energy resources from Canada will have a lower 10% tariff,” the executive order noted.
Trump said the tariffs would remain in place until the three countries kept their “promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
President Trump is positioning America to be safe and successful again.
Today, he is holding Mexico, Canada, and China accountable for their role in the flow of illegal aliens and illicit drugs across our borders. These countries are now on notice to work quickly to stop the… https://t.co/KZvb76j0Oy
— Speaker Mike Johnson (@SpeakerJohnson) February 2, 2025
The White House cited various expert opinions that tariffs boosted local production and encouraged reshoring of manufacturing jobs. It also cited Biden administration Treasury Secretary Janet Yellen’s May 2024 opinion that then-President Joe Biden’s tariffs on Chinese electric vehicles and semiconductors would not significantly increase retail prices for American consumers.
Some U.S. steel executives said tariffs imposed by the first Trump White House boosted profits and expressed support for Trump’s second-term tariffs.
Memo to the press:
When a president is elected by the People and then does what he promised to do, that’s democracy.
When a president is thwarted by unelected bureaucrats, that’s oligarchy.
President Trump refuses to bend the knee to that oligarchy. Buckle up!
— JD Vance (@JDVance) February 2, 2025
Hyundai Global CEO José Muñoz told Axios on Jan. 15, 2025 that the carmaker’s $15 billion investment in the U.S. signified its increasing localization, which it hoped would insulate it from the tariffs. Hyundai Motor’s affiliate, Hyundai Steel, said Jan. 22 it was weighing building a steel plant in the U.S. as the impending tariff announcement drew near, Reuters reported.
Volkswagen, which has one of its largest factories in Mexico and made nearly 350,000 cars in 2023 for export to the U.S., is the most vulnerable of all German automakers to the tariffs, according to Reuters. The carmaker reportedly said it was reviewing for any potential impact from the tariffs on Mexico and expressed hope a trade conflict would be averted.
Volkswagen’s two premium brands, Audi and Porsche, have never built cars in the U.S. but were considering changing that as of late January 2025, Fortune reported.
Several other industries also considered making changes to their production processes ahead of the tariffs, according to Reuters. (RELATED: ‘He Has The Political Mandate’: Companies Scramble To Respond To Trump’s ‘Beautiful’ Tariff Hikes)
David French, the U.S. National Retail Federation’s (NRF) Executive Vice President of Government Relations, said the NRF supported Trump’s “goal of strengthening trade relationships and creating fair and favorable terms for America” but considered the tariffs “steep” and their imposition on “three of our closest trading partners…a serious step.”
Mike Sommers, President and CEO of the American Petroleum Institute, said the U.S.’s energy production and market are highly integrated with those of Canada, Mexico and China. He promised to “work with the Trump administration on full exclusions that protect energy affordability for consumers, expand the nation’s energy advantage and support American jobs.”
John Murphy, Senior Vice President of the U.S. Chamber of Commerce, said Trump was right about the border and fentanyl crises but that the emergency tariffs were “unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains.”
Canadian authorities, on the other hand, slammed the tariffs as “unreasonable and unjustified” and imposed retaliatory tariffs on various U.S. consumer goods.
Outgoing Canadian Prime Minister Justin Trudeau declared Saturday night Canada’s response would be to enact a 25% tariff on Canadian exports to the U.S.
“Like the American tariffs, our response will also be far reaching and include everyday items such as American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes,” Trudeau said. “It’ll include major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more.”
Trudeau also noted the legacy of U.S.-Canada relations, saying, “if President Trump wants to usher in a new ‘golden age’ for the United States, the better path is to partner with Canada, not to punish us.”
Mexican President Claudia Sheinbaum accused the White House of “slander” and the “United States armories” of selling arms to cartels, according to a translation of her statement. “Problems are not resolved by imposing tariffs,” she wrote. She and Canadian Prime Minister Justin Trudeau discussed the tariffs and other matters.
In addition, “China firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests,” the Chinese foreign ministry said, adding that the tariffs “violate [World Trade Organization] rules” and that the U.S. should “correct its wrongdoings.”