On Saturday, February 1st, the Trump administration imposed tariffs targeting Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA). As a means to address the threat of illegal aliens and drugs, the tariffs include a 25% tariff on imports from Canada and Mexico and an additional 10% tariff on imports from China. The imposed U.S. tariffs singled energy resources from Canada at a reduced 10% tariff.
The U.S. tariffs were set to take place at 12:01 am Tuesday, February 4th. Mexico and Canada have announced that their administrations have determined retaliatory plans and will implement them if needed. They have been in contact with the Trump administration since before President Trump took office and remain in communication.
The Response from Canada
Canadian Prime Minister Justin Trudeau responded on Saturday with an identical 25% retaliatory tariff on $107 billion of American goods. A meeting was set between the two leaders for Monday afternoon ahead of the 12:01 am Tuesday announced implementation.
Following the conclusion of that meeting, it was announced that the U.S. will postpone its tariff threats on Canada for 30 days, while they work on a border deal. In a post on X, Trudeau announced “I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan – reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl.”
The Response from Mexico
Mexico President Claudia Sheinbaum has indicated that her administration has a “Plan B” for retaliatory tariffs if it comes to that, but withheld specific details. She was expected to reveal those details this morning but instead made an announcement that Mexico will reinforce the Mexico-US border with 10,000 National Guard troops. The U.S. tariffs imposed on Mexico have been “paused for a month,” and according to Sheinbaum, the U.S. has also agreed to make efforts to prevent high-powered weapons from being trafficked into Mexico.
Trump has indicated that negotiations with Mexican leaders will continue over the next month to achieve a permanent deal. The talks are to be led by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, and Howard Lutnick, Trump’s yet-to-be-confirmed commerce secretary nominee.
The Response from China
The 10% tariff on Chinese products was issued allegedly for China’s role in the influx of fentanyl and not doing enough to hinder the production of the precursor chemicals used in fentanyl. Additionally, there is a significant trade deficit with the U.S. that reached nearly $1 trillion last year. Trump ordered a review of the current trade relationship, with an expected deadline for any additional duties being April 1st.
China vowed to file a legal case at the World Trade Organization against the United States and take “necessary countermeasures to defend its legitimate rights and interests.” However, a statement issued by the Foreign Ministry did not include any specific retaliatory measures. President Trump has also indicated that he is open to negotiations with Chinese leader Xi Jinping, citing resolving Russia’s war in Ukraine as one potential topic of discussion. The two leaders are expected to meet within the next 24 hours.
ProTrans and TOC Logistics International LLC. regularly monitor updates on proposed tariff changes and other developments that may affect the global supply chain. We subscribe to industry newsletters, government announcements, and trade publications to stay ahead of potential regulatory shifts and encourage our clients to do the same. Contact our team for any additional questions or concerns you may have in navigating these complexities.