Trump Says 25% Tariff on Canada and Mexico Starts Saturday; Threatens It Could Rise Later

However, whether CBP would be ready to apply the tariffs that quickly is an open question. CBP didn't respond to a request by deadline on how long it would take ACE to be ready.

Whether imported oil from the two countries will be included in the tariff action has not been decided, Trump said. "We may or may not, we're going to make the determination, probably tonight, on oil," he said. He said if the oil is priced right, it may be allowed duty free. About a third of what Canada exports to the U.S. is oil and gas; Canadian Ambassador Kristin Hillman told NPR on Jan. 30 that when you only consider manufactured goods, it's Canada that has a bilateral trade deficit.

"Look, Mexico and Canada have never been good to us on trade, they've treated us very unfairly on trade," Trump said. "And we will be able to make that up very quickly, because we don't need the products that they have. We have all the oil you need, we have all the trees you need, meaning the lumber.

"For us to be subsidizing Canada to the tune of $175 billion a year, and subsidizing Mexico to the tune of $250 billion, $300 billion a year, and Mexico is a method [for] China sending in its product ... and with China, I'm also thinking about something, because they're sending fentanyl into our country. So China's going to end up paying a tariff, also, for that. We're in the process of doing that, we'll make the determination of what [level] it's going to be. China has to stop sending fentanyl into our country and killing our people."

That was the second time he addressed the tariffs in the brief session with reporters. When he was first asked about the tariff threat, he said, "So we'll be announcing the tariffs on Canada and Mexico for a number of reasons -- number one is the people that have poured into our country, so horribly and so much. Number two are the drugs, fentanyl and everything else that have come into our country; number three is the massive subsidies that we're giving to Canada and to Mexico in the form of deficits."

So, he said, the U.S. will impose 25% tariffs on Canadian and Mexican goods. "And we will really have to do that, because we have really big deficits with those countries. Those tariffs may or may not rise with time."

The trade deficit with Canada and with Mexico is not as large as what Trump claims; from January to November 2024, Canada sent about $55 billion more in goods to the U.S. than it imported from the U.S., and the full-year trade deficit in goods in 2023 was $64 billion. For Mexico, during January-November 2024, the U.S. imported $157 billion more than it exported to Mexico. In 2023, the trade deficit in goods with Mexico was $152 billion.

Canada and Mexico didn't immediately announce what their responses will be, but both countries have said they are preparing retaliatory tariffs.

According to the Peterson Institute for International Economics, the U.S. imported more than $195 billion in transportation equipment (cars, trucks, buses, trains, airplanes) from the two countries in 2023: about $113 billion in machinery, about $145 billion in fuel, more than $95 billion in electronics, more than $52 billion in metals, almost $40 billion in prepared food and nearly $36 billion in vegetables. Because nearly all of those goods qualified for USMCA benefits, the average tariff paid at that time on the products ranged from .1% to .3%.

Senators whose states' economies are particularly intertwined with either Mexico or Canada -- who talked with International Trade Today about the tariffs before Trump confirmed they were coming -- were muted in their response.

Sen. Ted Cruz. R-Texas, said that Trump said he'd be putting 25% tariffs on Canadian and Mexican goods "unless the governments act in assisting us in securing our borders. My advice to Canada is they should do exactly that, and help us secure the border. I think we have seen that President Trump uses tariffs very effectively, for leverage."

Sen. Gary Peters, D-Mich., said " so much of [Michigan's auto] manufacturing process is integrated with operations in Canada." Peters said he doesn't know how the tariffs could be avoided, or, if imposed, rolled back. "I don't know what the metric is, so I don't know what they have to do to comply," he said. Michigan imports or exports $135.2 billion in auto parts and completed autos in a year, accounting for 58% of its trade, according to the Alliance for Automotive Innovation, a domestic auto manufacturing trade group.

Sen. Alex Padilla, D-Calif., said: "If he follows through on these threats to increase tariffs, it's going to mean higher prices on so many goods for the American people, it's not only going to be painful for working families, for someone who ran on trying to reduce prices, trying to tackle inflation, this is doing exactly the opposite."

When asked if Congress should try to curtail the president's power to impose tariffs, such as by clarifying that the International Emergency Economic Powers Act, Padilla said, "It's definitely an important debate to have, and for that effort to advance. But sadly, fundamentally, you're dealing with a president who has utter disregard to the law, the Constitution."