On February 1, 2025, U.S. President Donald Trump declared a new series of tariffs on Mexico, Canada, and China, America’s top three closest trading partners. Tariffs are taxes placed on goods imported from other countries and are used as a tool against foreign competition on the national market. Although tariffs are meant to support national domestic businesses and industries, U.S. businesses directly pay the tariffs on imported goods to the government. To make up for these additional costs on imports, businesses must pass costs onto consumers who buy their goods to avoid losing money. Trump’s tariffs are known as ad valorem tariffs, meaning that the tariff amounts are calculated based on a percentage of the original product value. Currently, the President plans to impose 25% tariffs on Mexico and Canadian imports, and a 10% tariff on Chinese imports.
The next day, on February 2, President Trump acknowledged that these tariffs could cause “some pain” for Americans. Investors and economists who studied the market expressed concern over inflation since the current tariff rate would go from 2.4% to 31%. Inflation would likely jump from 2.9% to as much as 4%. Despite these economic concerns, Trump is set on his tariff plans, and he cites them as a way to protect domestic industries and fund the government. Additionally, Trump has stated that these tariffs were deliberately made to target undocumented immigrants and stop illegal drugs from coming into the U.S.
On Trump’s Inauguration Day, he claimed that foreign drug cartels were killing 250,000 to 300,000 Americans per year, making it clear that these tariffs were absolutely necessary in retaliation. White House spokesperson Karolinah Leavitt agreed, saying the tariffs were warranted since fentanyl has killed “tens of millions of Americans.” However, these claims have been proven false. Overdose deaths from all drugs, including fentanyl, reached a highest point of 114,000 fatalities per year in 2022 and fell below 90,000 deaths in a year in 2023. Nevertheless, the President has cited all three countries as reasoning behind the amounts of fentanyl on U.S. streets. Trump is set on punishing Canada for supposed involvement in the U.S. fentanyl supply, saying that Canada has a “growing footprint” in distribution with Mexican cartels. However, law enforcement and drug policy experts agree that Canada contributes extremely little to the country’s fentanyl supply, only adding 1%. Unlike Canada however, Mexico produces a vast majority of fentanyl that flows into U.S. streets. Current Mexican president Claudia Sheinbaum has been working hard to cooperate with U.S. law enforcement officials to end the cartels, causing the amount of seized fentanyl to decrease by 20% and lowering the potency of fentanyl pills. While the fentanyl is distributed from drug cartels in Mexico, many law enforcement agencies and government officials agree that the fentanyl is made by industrial companies from China. China’s government has resisted efforts to target and put an end to this supply chain, but they have implemented regulations under pressure from the Biden administration. Many drug organizations have been ended, and China has stated that the U.S. tariffs would undermine their cooperation against drug trafficking.
Canada and Mexico have imposed retaliatory tariffs on American goods, creating a new trade war between the countries. Canada has imposed a 25% tariff on American imports. Mexico has mentioned that it would impose them too, but is yet to mention any rates or products. Trump has threatened to increase his own tariff rates if retaliatory tariffs were placed, and said, “we can play the game all they want.”
Written by Claire Liu
