On Tuesday, President Donald Trump implemented new tariffs, escalating tensions with key trading partners. The U.S. began imposing a 25% tariff on goods from Canada and Mexico, along with an additional 10% tariff on imports from China. This move aims to reduce illegal immigration and drug trafficking.

Earlier this year, Trump postponed these tariffs to give Canada and Mexico time to negotiate trade deals that could help address U.S. border security and control the flow of drugs like fentanyl. However, last week, Trump confirmed that the tariffs would go into effect as planned, stating in a post on Truth Social, “Drugs are still pouring into our country from Mexico and Canada at very high and unacceptable levels.” He added that the tariffs would remain until the flow of drugs is significantly reduced.

Trump also hinted at additional tariffs scheduled for April 2 but didn’t provide further details.

Impact on U.S. Economy and Trade

These tariffs are part of Trump’s broader strategy to hold Mexico, Canada, and China accountable for tackling illegal immigration and curbing the fentanyl crisis. The White House emphasized that the tariffs signal a national emergency due to the rising flow of illicit drugs into the U.S. from these countries.

While the tariffs were temporarily delayed, both Canada and Mexico made efforts to address U.S. concerns. Canadian Prime Minister Justin Trudeau announced a $1.3 billion border plan and the appointment of a fentanyl czar. Mexican President Claudia Sheinbaum committed to deploying 10,000 troops to the U.S.-Mexico border.

China Responds to the Tariffs

The 10% tariff on imports from China, which Trump blames for fueling the fentanyl crisis, is also going into effect. This has sparked a response from China, which has vowed to take “countermeasures” to protect its interests. China’s Ministry of Commerce criticized the tariff hikes, calling them a violation of World Trade Organization rules and warned that they could harm future cooperation on combating drug trafficking.

Despite his strong stance, Trump’s actions against China are less severe than the broad tariff increases he proposed during his campaign, which included a 10% to 20% tariff on imports from all countries, plus additional tariffs specifically targeting China.

Concerns Over Rising Consumer Costs

Critics argue that the tariffs will lead to higher costs for American consumers. Retailers have expressed concern that the tariffs will increase prices on products, potentially forcing them to reduce inventory or change product details. For example, Dollar Tree, which imports heavily from China, warned that it may have to stop selling certain items if tariffs make them too expensive.

Walmart also voiced concerns, stating that higher tariffs could lead to increased prices for consumers still feeling the effects of inflation. Goldman Sachs echoed this sentiment, warning that higher tariffs could raise costs for everyday Americans.

David French, from the National Retail Federation, called for a review of U.S. trade relationships, emphasizing that tariffs should be carefully targeted to ensure they benefit American workers and businesses. He stressed that “tariffs are taxes paid by Americans,” and any new tariffs should be implemented strategically to minimize negative effects on consumers.