Trump set to impose 25% tariffs on Mexico, Canada by February 1

US President Donald Trump has announced his intention to implement tariffs of up to 25% on Mexico and Canada, set to take effect by February 1.

The move, which was reiterated by Trump during a Monday night interview in the Oval Office, stems from his ongoing concerns over the flow of undocumented migrants and drugs into the United States from its two neighbors, News.Az reports, citing Bloomberg.

“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people” into the US, Trump said in response to questions from reporters in the Oval Office on Monday night. “I think we’ll do it Feb. 1.”

Trump’s plans for tariffs on two nations vital for US energy and auto imports threatens to set off a trade war among the signatories of the US-Mexico-Canada Agreement, the successor to Nafta negotiated at Trump’s insistence during his first term. The pact governed the flow of $1.8 trillion in goods and services trade, based on 2022 data.

Both Canada and Mexico have said they’d retaliate against American goods if Trump slaps tariffs on them. The USMCA is up for review in 2026.

“Canada’s a very bad abuser,” Trump said, complaining about the current of fentanyl and migrants across the northern US border.

The dollar jumped against most major currencies following Trump’s remarks. Bloomberg’s dollar gauge rose as much as 0.7%, the most since Dec. 18, as investors sought the safety of the world’s reserve currency. The Canadian dollar and Mexican peso fell as much as 1.4% each against the greenback on the news.

There was some relief in Chinese markets as Trump fell short of announcing immediate levies against the world’s second-largest economy.

An index of Chinese stocks traded in Hong Kong rose 1%, while gauges in the mainland fluctuated. The offshore yuan slipped 0.2%, but held on to most of its Monday rally.

News.Az