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Trump Delays Some Mexican, Canadian Tariffs After Talk With Sheinbaum
"Everything Trump does on trade maximizes chaos and uncertainty," said one lawmaker.
Mar 06, 2025
In a move that one Democratic lawmaker said would further harm the United States' "credibility and our economy," U.S. President Donald Trump on Thursday postponed tariffs on certain Canadian and Mexican imports after a discussion with Mexican President Claudia Sheinbaum.
Trump had imposed 25% tariffs on the countries' imports on Tuesday, saying the levies were aimed at pressuring Canada and Mexico to take more action to stop the flow of fentanyl into the United States.
Sheinbaum, who had threatened to impose tariffs in retaliation, said in a press conference that she convinced Trump to delay the tariffs on products traded under the U.S.-Mexico-Canada Agreement (USMCA) until April 2.
The Mexican leader said she had sent Trump U.S. Customs and Border Protection data showing that fentanyl trafficking has already dropped significantly in recent months, with seizures of the drug decreasing by 40% over the past month.
Mexican President Claudia Sheinbaum: “It’s a very definitive moment for Mexico, depending on what happens these days until Sunday. There will be no submission. Mexicans are brave, resistant, and full of strength.”
Sheinbaum’s statement comes as Mexico prepares to respond to U.S.… https://t.co/IgdSEzqdL7 pic.twitter.com/LvxdvOVfq3
— Drop Site (@DropSiteNews) March 6, 2025
Sheinbaum said she asked Trump, "How can we continue cooperating, collaborating when this hurts the people of Mexico?"
"It was simply: 'Understand me. The most important thing is my people,'" she said Thursday. "'And I need to continue collaborating and cooperating with you, but in a situation of equality.'"
Aaron Reichlin-Melnick, a senior fellow at the American Immigration Council, noted that only a very small amount of fentanyl enters the U.S. from Canada.
Trump did not make a public statement about delaying the Canadian tariffs on Thursday, but included them in an executive order he signed postponing them.
The president also delayed 25% tariffs on auto industry imports on Wednesday after car manufacturers said the levies would hit them hard financially.
U.S. Rep. Don Beyer (D-Va.) said businesses across the U.S. "are delaying decisions, investments, and hiring, because they don't know what Trump will do."
"Everything Trump does on trade maximizes chaos and uncertainty," said Beyer. "Keeping his tariffs in place will cost families up to $2,000, but imposing and lifting them over and over again also has a cost."
With Trump's delay only applying to goods traded under USMCA, the White House said 62% of imports from Canada and 50% of those Mexico will still face the tariffs that were imposed this week. Experts have stressed that these costs will be passed on to consumers.
Outgoing Canadian Prime Minister Justin Trudeau said Thursday that the country expects "to be in a trade war that was launched by the United States for the foreseeable future."
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Analysis Finds Trump Tariffs Will Cost Average US Family $1,600 or More Per Year
"The trade war Trump is igniting will weaken our economy and cause chaos in our marketplace as Americans pay the cost in the form of higher prices on everyday items," said Rep. Don Beyer.
Mar 04, 2025
As U.S. President Donald Trump's new tariffs took effect on Tuesday, Congressman Don Beyer released a Joint Economic Committee report showing that the policies could cost the average working-class family in the United States at least $1,600 annually.
"The tariffs Trump just imposed on Canada, Mexico, and China will raise costs by up to $2,000 per year for an average American family," Beyer (D-Va.) said in a statement. "The trade war Trump is igniting will weaken our economy and cause chaos in our marketplace as Americans pay the cost in the form of higher prices on everyday items."
Dean Baker, co-founder and senior economist of the Center for Economic and Policy Research, warns that Trump's tariffs could cost families even more than the estimates from Beyer's report, which cites figures from the Budget Lab at Yale University.
"While our report does not touch on this, these tariffs will also lead to retaliation that badly harms American producers," Beyer said. "And they will fail to achieve any of the pretextual objectives Trump has stated for imposing them. Less than two months into his term, Trump is running the economy into the ground and raising a real and growing risk of a recession."
Ignoring experts' warnings about impacts on consumers and the economy, Trump on Tuesday doubled his previous tariff for Chinese imports to 20% and—after a monthlong delay—hit Canadian and Mexican imports with 25% tariffs. As The Associated Pressreported, the moves sparked "swift retaliation" from "America's three biggest trading partners."
Leaders from those countries had warned of their responses if Trump followed through on his threats. There was also evidence of what would happen from the tariffs that the president imposed on China during his first term. At the time, Beyer's report notes, "U.S. importers and consumers paid almost entirely for Trump's tariffs through higher prices."
Trump has recently claimed that his plan will force production in the United States, but the report points out that the new "tariffs also impact the price of domestically produced goods by causing U.S. producers to raise prices if their supply chain relies on imported raw materials subject to the tariffs."
Using figures released Monday by the Budget Lab, Beyer's report warns that this time:
- Electronics, like computers, phones, and televisions, will see overall prices rise by nearly 11%;
- Clothing prices are expected to also rise by 7.5%;
- The price of cars, car parts, and other motor vehicles are expected to increase by over 6%;
- Oil will also rise by 1.7% and petroleum and coal products will rise by 1.6%, making it more expensive for families to fill up their gas tanks and heat their homes;
- And at a time when a trip to the grocery store is already squeezing household budgets, grocery prices will jump under these tariffs, with fresh produce prices rising by nearly 3%, rice prices increasing by 4.4%, and food prices overall rising by nearly 2%.
"In addition to harming the national economy, Trump's tariff policies will significantly impact state and local economies," the report says. "In fact, small counties in the South and Midwest tend to have economies that are most reliant on international trade. Those states that are heavily dependent on trade for statewide business may also be particularly impacted."
Despite the anticipated impacts of the tariffs that Trump has already imposed, he is expected to go even further, targeting the European Union and beyond. The Tax Policy Center warned in October that "a 20% worldwide tariff and a 60% tariff on Chinese goods, one of many import tax ideas floated by... Trump, would increase household taxes by an average of nearly $3,000 in 2025."
Beyer—who serves on the panel behind the report and the House Ways and Means Subcommittee on Trade—noted Tuesday that "Republicans in Congress could stop this at any time by passing legislation I and others have offered to rein in Trump's abuses of tariff authorities, but they appear content to help Trump raise prices and risk economic disaster."
Separately, Beyer and every other Democrat on the subcommittee released a joint statement stressing that "Americans simply cannot afford to be caught in endless trade wars" and that they "are united in rejecting these irresponsible tariffs designed to increase revenue for more tax cuts for the ultrawealthy."
Republicans control not only the White House but also both chambers of Congress, and GOP House members last month advanced a budget resolution that would fund an extension of Trump's 2017 tax cuts for the rich by slashing health and food assistance programs that help millions of working-class Americans.
Beyer and his subcommittee colleagues called on House Republicans "to work with us to reassert Congress' role in setting strategic, stable trade policies and to invest in the American economy, instead of abdicating their responsibilities to President Trump and Elon Musk," the billionaire leading the administration's effort to gut the federal government.
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As Economic Warnings Flash Red, Trump Plows Forward With Massive Tax Hike on Ordinary Americans
After a monthlong delay, Trump administration tariffs on Mexican and Canadian imports went into effect Tuesday.
Mar 04, 2025
As the Trump administration's purge of federal workers continues and tariffs imposed on key U.S. trade partners Mexico and Canada take effect Tuesday, multiple economic indicators are warning of potential pain ahead.
On Monday, the Federal Reserve Bank of Atlanta released an estimate for GDP performance in the first quarter of 2025, which showed an economic contraction of 2.8%. The "GDPNow" estimate is a model-based projection that is not an official forecast from the Atlanta Fed, but it does paint a different economic picture from just a few weeks ago, when the same model-based projection estimated growth of almost 3% in early February.
"Basically unprecedented for a new administration to inherit a strong economy and immediately tank it as both businesses and consumers internalize its agenda," wrote Bharat Ramamurti, a former deputy director at the National Economic Council, in response to the prediction from the Atlanta Fed.
Stocks also tumbled Monday after Trump announced that 25% tariffs on Canada and Mexico would go into effect the next day. Trump also reiterated that the U.S. would impose an additional 10% tariff on China, on top of 10% tariffs that were already in effect.
Meanwhile there are also signs that consumer confidence is declining. The research group the Conference Board released its Consumer Confidence Index for February on Tuesday, which showed the largest monthly decline in consumer confidence since August 2021. "Respondents to the board's survey expressed concern over inflation with a significant increase in mentions of trade and tariffs, the board said," according to The Associated Press. The retail giant Target said Tuesday that consumer confidence is waning, according to CNN.
In a video discussing the Atlanta Fed's "GDPNow" estimate, journalist Krystal Ball reminded listeners that billionaire Elon Musk, the man Trump has deputized to help oversee cuts to the federal spending and bureaucracy, said that the work of his Department of Government Efficiency would cause pain. Musk in October 2024 said that then yet-to-be-created body's work would "necessarily involve some temporary hardship," according to Vox.
The Trump administration has so far already cut tens of thousands of workers, but even if Trump successfully carried out his proposed mass firings of probationary workers (which a judge recently said were likely illegal), possibly impacting 200,000 people, that "on its own, is not recessionary," according to economist Ernie Tedeschi, director of economics at the Yale University Budget Lab, who was interviewed by CNBC.
The U.S. Bureau of Labor Statistics' February employment situation report will be released on Friday, and economist Dean Baker, who works for the left-leaning Center for Economic and Policy Research, wrote Tuesday that the numbers "are not not likely to pick up much of the effect of the DOGE cuts." That's partly because the data will not capture the time period when many of the cuts went into effect, according to Baker.
The impact of tariffs, however, is more certain. China, Mexico, and Canada account for over 40% of U.S. imports, and key goods imported from the three countries include crude petroleum, cars, computers, telephones, and car parts and accessories, according to the The New York Times.
Tariffs are essentially a tax on imported goods that economists say are largely passed on to consumers.
According to analysis released in early February, the Peterson Institute for International Economics found that the tariffs that were previously announced but went into effect on Tuesday constitute the "the largest tax increase in at least a generation."
Taking into account the 25% tariffs on goods from Canada (aside from the lower rate for Canadian energy) and Mexico, and the 10% increase in tariffs on imports from China, "the direct cost of these actions to the typical, or median, U.S. household would be a tax increase of more than $1,200 a year."
After the Trump administration announced the tariffs on Mexico and China, which the White House said were being implemented to pressure the three countries into halting the flow of fentanyl and immigrants, Trump agreed in February to delay their imposition on Canada and Mexico for a month after those countries announced concessions.
The left-leaning economist Paul Krugman called the tariffs on Mexico and Canada, two countries with whom Trump once helped negotiate a free trade deal, "a profoundly self-destructive move."
"It will impose huge, possibly devastating costs on U.S. manufacturing, while significantly raising the cost of living—without any visible justification," he wrote.
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