The U.S. is set to implement 25% tariffs on imports from Canada and Mexico and 10% on items coming from China on Saturday, Feb. 1, White House Press Secretary Karoline Leavitt said on Friday.
Leavitt, when asked whether there would be any exceptions, said the full list would be available on Saturday.
“The president is intent on ensuring that he effectively implements tariffs while cutting inflation and costs for the American people,” Leavitt said. “If the president at any time decides to roll back those tariffs, I’ll leave it to him to make that decision. But starting tomorrow, those tariffs will be in place.”
Canadian Prime Minister Justin Trudeau said Canada will react in a “forceful but reasonable” way.
“If the president does choose to implement any tariffs against Canada, we’re ready with a response—a purposeful, forceful but reasonable, immediate response,” Trudeau reportedly told reporters on Friday, according to the Globe and Mail.
It was still unclear on Friday afternoon whether some items, such as oil, would be exempt. The New York Times reported that approximately one-third of all U.S. imports come from Canada, China or Mexico, including 60% of imported crude oil, fruits and vegetables, and clothing including 99% of all shoes sold in the United States, according to the Footwear Distributors & Retailers of America, and auto parts and vehicles.
Trump is seeking to use the tariffs as a way to increase leverage on the three countries to stop the flow of immigrants and drugs into the U.S.
According to an article from Supply Chain Management Review’s sister publication, Logistics Management, there are a few areas that could be impacted more than others.
In a research note, S&P Global Ratings observed that with a 25% tariff by the U.S. on imports from Canada and Mexico, there are a few sectors that could be the most impacted, noting that based on global input-output tables, output from the auto and electrical equipment sectors is most exposed to a tariff shock in Mexico, with commodity-related processing sectors having the largest Canadian exposure. As for the U.S., the firm said it estimates a much smaller output at risk if its direct neighbors were to impose in-kind tariffs, with the most exposed sectors being agriculture and fishing, metals, and autos.
“We anticipate Canada would then respond in kind by also implementing a 25% across-the-board tariff on U.S. imports,” said Satyam Panday, chief US and Canada economist, S&P Global Ratings.
And Elijah Oliveros-Rosen, chief emerging markets economist, S&P Global Ratings, explained that, regarding Mexico, his firm believes it it’s very unlikely the government would place tariffs on U.S.-manufactured imports, given most are intermediate goods eventually exported to the U.S.
“Therefore, we expect the Mexican government could impose tariffs on agricultural and food imports, but not manufacturing,” he said.
For more impact on the tariffs, read: Industry stakeholders assess impact of anticipated tariffs
Jeff Berman, editor of Logistics Management, contributed to this report
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