Trump Confirms Tariffs on Canada and Mexico, Effective Tuesday

By The Chronicle Collective Updated March 3, 2025 5:42 ET

President Donald Trump announced at the White House on Monday that tariffs on Canada and Mexico will take effect on Tuesday, citing concerns over migration, drug trafficking, and the need to boost U.S. manufacturing. He stated there is no possibility of a deal before the midnight deadline, locking in the 25% tariffs on both nations.

The tariffs were initially set for early February but postponed after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum agreed to send additional troops to their borders to address migrant flows and illegal drugs entering the United States. Trump indicated these measures have not met expectations. “No room left for Mexico or for Canada.” he told reporters. “The tariffs, you know, they’re all set. They go into effect tomorrow.” He emphasized the influx of fentanyl, saying, “Vast amounts of fentanyl have poured into our country from Mexico, and as you know, also from China, where it goes to Mexico and goes to Canada.”

The announcement triggered immediate market reactions. The Dow Jones Industrial Average dropped 1.48%, the Nasdaq Composite fell 2.64%, and the S&P 500 declined 1.5%, its largest drop since December, according to CNBC reports. The tariffs will apply to products including avocados, beer, and vehicles from Mexico, and crude oil, lumber, and car parts from Canada, likely increasing costs for U.S. consumers and businesses. Reports from The Wall Street Journal also noted Trump plans to raise tariffs on China by an additional 10%, following a 10% tariff imposed in February.

Trump linked the tariffs to job creation, stating, “Companies, such as car manufacturers, need to build their car plants … and other things, in the United States, in which case you have no tariffs.” Honda has already shifted production of its next-generation Civic hybrid from Mexico to Indiana, according to The Daily Wire, aligning with this policy.

Tensions with Canada and Mexico have risen. Canadian officials, after meeting with Trump’s border czar, Tom Homan, last week, expressed uncertainty about the administration’s demands, sources told The Wall Street Journal. Commerce Secretary Howard Lutnick acknowledged progress on border security but noted, “They haven’t done enough on fentanyl,” in a statement to CNN. Both Canada and Mexico have promised retaliatory tariffs on U.S. goods, though specifics remain undisclosed.

The tariffs are now set to begin Tuesday, with Canada and Mexico preparing responses. The economic and diplomatic effects will become clearer in the days ahead as the trade landscape shifts.