President Donald Trump said Monday night that he planned to impose a 25% tariff on products from Canada and Mexico on Feb. 1 and might impose levies on most American imports, as he signed an executive order directing federal agencies to deliver a sweeping review of U.S. trade policies by spring.
Speaking to reporters from the Oval Office on Monday evening, Trump said he was thinking of putting tariffs on Mexican and Canadian products because those nations were allowing “mass numbers of people to come in and fentanyl to come in.” Asked when he might put those in place, Trump said, “I think we’ll do it Feb. 1.”
Trump also said he “may” impose a universal tariff on all imports, saying that “essentially all countries take advantage of the U.S.”
The comments renewed the threat of an imminent trade war, just hours after such an outcome had appeared to recede. Trump signed an executive order Monday directing various agencies to study a wide variety of trade issues with an eye toward future tariffs, but he did not impose any new levies immediately, as he had previously threatened.
Still, the executive order could tee up a variety of significant trade actions in the months to come. The order directed Trump’s officials to deliver reports to him, mostly by April 1, assessing unfair trade practices, currency manipulation, U.S. technology controls and discriminatory foreign taxes.
It ordered U.S. officials to examine flows of migrants and drugs from Canada, China and Mexico to the United States, and the compliance of those three countries and others with their existing trade agreements with the United States.
The executive order also called for officials to investigate the causes of large and persistent trade deficits and “recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.”
Trump’s order also followed through on his recent comments to create an agency he has called the External Revenue Service to collect tariffs. It asked officials to “investigate the feasibility of establishing and recommend the best methods for designing, building and implementing” the External Revenue Service to collect tariffs and duties from foreign sources. Tariffs and other import duties are currently collected by Customs and Border Protection.
U.S. officials will also spend the next few months identifying countries the United States could negotiate new trade deals with, as well as carrying out a full review of the U.S. industrial and manufacturing base to assess whether further national-security-related tariffs are warranted.
In his inauguration address Monday, Trump said he would “immediately begin the overhaul of our trade system to protect American workers and families.”
“The American dream will soon be back and thriving like never before,” he added.
Trump’s advisers say he remains more convinced than ever that tariffs can be used to great advantage. The executive order will tee up the president’s ability to deploy tariffs on numerous targets should he so choose, moves that could still scramble international supply chains and spawn global trade wars.
People familiar with the plans said the president and his advisers have been favoring a combination of trade policies like those he floated on the campaign trail. Those include a universal tariff on foreign products, a higher tariff on China and separate measures that could address the trade relationship with Mexico and Canada by imposing taxes on those countries as well.
By ordering investigations into a variety of trade topics, Trump may firm up the legal rationale that will help his tariffs survive court challenges, while also giving some of his top trade officials time to be confirmed by the Senate, analysts said.
Trump has praised tariffs for their ability to help U.S. factories, raise revenue to help pay for the tax cuts he hopes to enact and generally serve as a source of leverage in negotiations with foreign countries.
While managing trade is technically the domain of Congress, various trade laws have given the president wide-ranging powers to issue tariffs. The president can use them to defend U.S. national security, answer unfair trade practices and counter various types of international emergencies.
Trump and his advisers are continuing to debate the best method to issue their tariffs, but they believe they have the legal authority to use any of them, people familiar with the deliberations said.
Trump said on social media in November that he would impose tariffs on Canada and Mexico on his first day in office. In response, the Canadian and Mexican governments have tried to mollify Trump and ward off tariffs. They have arranged meetings with the president and his advisers, and reassured him about the measures they are taking to secure their borders.
Still, both governments have also warned that they will respond to any tariffs with penalties of their own. Canada said it planned to retaliate with tariffs and other trade restrictions if Trump went ahead with his plan, and Mexico has threatened its own tariffs on American exports.
“Our country is absolutely ready to respond to any one of these scenarios,” Dominic LeBlanc, the Canadian finance minister, said Monday evening. “We still continue to believe that it would be a mistake for the American government to proceed with imposing tariffs.”
During his first term, Trump rocked the country’s global trade relationships by imposing tariffs on foreign washing machines, solar panels, metals and a variety of products from China. Those moves nearly doubled the average tariff rate applied to imported goods, though U.S. tariffs remained comparatively low by international standards.
Some U.S. manufacturers credit the tariffs that Trump imposed during his first term — and that President Joe Biden kept in place — with helping their businesses survive amid intense competition from countries like China.
But economists and other businesses argue that tariffs can also cause economic harm, by raising costs for households and businesses that rely on imported products, and inciting retaliation from other governments that can hurt U.S. exports.
Lydia Cox, an economist at the University of Wisconsin-Madison, described tariffs as “a pretty blunt instrument” in an online forum hosted by the Harvard Kennedy School last week. Tariffs offer some potential benefits for protected industries, she said, “but they create a lot of collateral damage along the way.”
The New York Times Services
