American industries, interest groups, and consumers are bracing for the effects of new tariffs the Trump administration imposed Saturday on three key trading partners.
President Donald Trump announced “a 25% additional tariff on imports from Canada and Mexico as well as a 10% additional tariff on imports from China” to address the “national emergency” of illegal immigration and transnational drug trafficking. “Energy resources from Canada will have a lower 10% tariff,” the executive order noted.
Trump said the tariffs would remain in place until the three countries kept their “promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
The White House cited various expert opinions that tariffs boosted local production and encouraged reshoring of manufacturing jobs. It also referenced Biden administration Treasury Secretary Janet Yellen’s May 2024 opinion that then-President Joe Biden’s tariffs on Chinese electric vehicles and semiconductors would not significantly increase retail prices for American consumers.
Whereas many in President Trump’s orbit expressed support for the tariffs — including Vice President JD Vance, who said the retaliation to the U.S. being taken advantage of “for decades” was “Donald Trump saying, ‘No more,’” and House Speaker Mike Johnson, who praised Trump for “holding Mexico, Canada, and China accountable” for the flow of illegal migrants and drugs across the U.S. border — public polling found support for tariffs to be less optimistic, with critics claiming tariffs would result in American consumers having to pay the higher prices.
Are you worried that countries will retaliate to these tariffs?
Vance: We’re sick of being taken advantage of. These tariffs are President Trump’s retaliation to decades of being taken advantage of. pic.twitter.com/bhaAFl0vRy
— Townhall.com (@townhallcom) February 2, 2025
Memo to the press:
When a president is elected by the People and then does what he promised to do, that’s democracy.
When a president is thwarted by unelected bureaucrats, that’s oligarchy.
President Trump refuses to bend the knee to that oligarchy. Buckle up!
— JD Vance (@JDVance) February 2, 2025
Only 40% of respondents (including 59% of GOP-identifying participants) to a January 2025 Harvard-Harris poll expressed support for new trade tariffs on Canada and Mexico. Only 52% (including 74% of GOP-identifying participants) expressed support for imposing new tariffs on China purposed to support American manufacturing.
President Trump is positioning America to be safe and successful again.
Today, he is holding Mexico, Canada, and China accountable for their role in the flow of illegal aliens and illicit drugs across our borders. These countries are now on notice to work quickly to stop the… https://t.co/KZvb76j0Oy
— Speaker Mike Johnson (@SpeakerJohnson) February 2, 2025
Some U.S. steel executives said tariffs imposed by the first Trump White House boosted profits and expressed support for Trump’s second-term tariffs.
Hyundai Global CEO José Muñoz told Axios on Jan. 15, 2025 that the carmaker’s $15 billion investment in the U.S. signified its increasing localization, which it hoped would insulate it from the tariffs. Hyundai Motor’s affiliate, Hyundai Steel, said Jan. 22 it was weighing building a steel plant in the U.S. as the impending tariff announcement drew near, Reuters reported.
Volkswagen, which has one of its largest factories in Mexico and made nearly 350,000 cars in 2023 for export to the U.S., is the most vulnerable of all German automakers to the tariffs, according to Reuters. The carmaker reportedly said it was reviewing for any potential impact from the tariffs on Mexico and expressed hope a trade conflict would be averted.
Volkswagen’s two premium brands, Audi and Porsche, have never built cars in the U.S. but were considering changing that as of late January 2025, Fortune reported.
Several other industries also considered making changes to their production processes ahead of the tariffs, according to Reuters. (RELATED: ‘He Has The Political Mandate’: Companies Scramble To Respond To Trump’s ‘Beautiful’ Tariff Hikes)
The American Farm Bureau expressed concern the tariffs would result in financial hardship for farmers and ranchers, a Jan. 31, 2025 letter to Trump reads.
David French, the U.S. National Retail Federation’s (NRF) Executive Vice President of Government Relations, said the NRF supported Trump’s “goal of strengthening trade relationships and creating fair and favorable terms for America” but considered the tariffs “steep” and their imposition on “three of our closest trading partners … a serious step.”
Mike Sommers, President and CEO of the American Petroleum Institute, said the U.S.’s energy production and market are highly integrated with those of Canada, Mexico and China. He promised to “work with the Trump administration on full exclusions that protect energy affordability for consumers, expand the nation’s energy advantage and support American jobs.”
John Murphy, Senior Vice President of the U.S. Chamber of Commerce, said Trump was right about the border and fentanyl crises but that the emergency tariffs were “unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains.”
Canadian authorities, on the other hand, slammed the tariffs as “unreasonable and unjustified” and imposed retaliatory tariffs on various U.S. consumer goods.
Outgoing Canadian Prime Minister Justin Trudeau declared Saturday night Canada’s response would be to enact a 25% tariff on Canadian exports to the U.S.
“Like the American tariffs, our response will also be far reaching and include everyday items such as American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes,” Trudeau said. “It’ll include major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more.”
Trudeau also noted the legacy of U.S.-Canada relations, saying, “if President Trump wants to usher in a new ‘golden age’ for the United States, the better path is to partner with Canada, not to punish us.”
In response to tariffs on steel and aluminum imposed by the U.S. during Trump’s first term in office, Canada implemented retaliatory matching tariffs on roughly $16.6 billion worth of U.S. goods and products, including steel, aluminum, yogurt, whiskey and candles, between July 1, 2018 and May 20, 2019, according to the Canadian government.
Mexican President Claudia Sheinbaum accused the White House of “slander” and the “United States armories” of selling arms to cartels, according to a translation of her statement. “Problems are not resolved by imposing tariffs,” she wrote. She and Canadian Prime Minister Justin Trudeau discussed the tariffs and other matters.
In response to tariffs imposed by the U.S. during Trump’s first term in office, Mexico implemented retaliatory tariffs on roughly $3 billion worth of U.S. goods, including steel, pork, apples, whiskey and cheese, between June 5, 2018 and May 20, 2019, according to The New York Times.
In addition, “China firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests,” the Chinese foreign ministry said, adding that the tariffs “violate [World Trade Organization] rules” and that the U.S. should “correct its wrongdoings.”
Duties collected from tariffs imposed during Trump’s first term in office reached a record high of $71 billion in 2019; $33 billion was collected in 2017, the last year before Trump’s tariffs took effect, according to a Cato Institute analysis. Businesses, in response to the tariffs, raised prices and were made less profitable due to higher costs, according to Cato.
Editor’s note: This report has been updated with additional information.
