Washington, D.C. – Over the weekend, President Trump announced 25% tariffs to be applied to goods coming from both Canada and Mexico beginning February 4th. Similar tariffs would be applied to Chinese imports at just 10%. Already, things are changing. Mexico’s president Claudia Sheinbaum just announced that after a conversation with U.S. President Donald Trump and concessions on border enforcement, tariffs are on hold for another month.
Yaël Ossowski, Deputy Director at the Consumer Choice Center, reacted to the news of a pause on US-Mexico tariffs by saying,
“We’re glad that the pause button is being hit here, but the uncertainty of whether prices will jump 25% tomorrow or next month is enough to leave consumers frustrated and confused. Economic uncertainty limits the economic potential for everyone involved in this trade dispute.”
Trump posted on social media that he spoke Monday morning with Canadian Prime Minister Justin Trudeau and would “be speaking to him again at 3:00 P.M.” While Mexico is standing down on a trade war with the U.S., Canada remains uncertain.
“The problem here is that Trump boosters are telling themselves that “tariffs work” when what we’re seeing is more akin to foreign policy negotiation between neighbors, not economics. Maybe the threat of tariffs work for President Trump’s agenda, but if tariffs are actually implemented, consumers will see exactly what they do, which is explode the prices for everyday goods,” said Ossowski.
The North American trading bloc is uniquely positioned to thrive in the years ahead. The deeply integrated supply chains between the U.S. and Canada have long helped keep consumer prices down, particularly in the automotive sector. In 2022 alone, Canada exported $12.9 billion in motor vehicle parts and accessories, with an overwhelming $11.4 billion of that destined for the U.S.
Tariffs on Canada could still happen as soon as Tuesday, meaning an immediate impact on US and Canadian consumers if retaliation is carried out.
In Michigan, Canadian automotive trade accounts for 13% of the state’s gross product. With Canada supplying $132 billion worth of oil and petroleum to the U.S. annually, there’s little chance the Trump administration could replace that supply with domestic production quickly enough to prevent a spike at the pump.
“If this afternoon phone call between Trump and Trudeau doesn’t go well, and they tend not to see eye to eye on much, Americans could see gas prices beyond the $4.00 mark before Valentine’s Day. We don’t think the livelihoods of entrepreneurs, small business owners, and everyday consumers should be on the bargaining table,” concluded Ossowski.
The Consumer Choice Center is an independent, nonpartisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life for consumers in over 100 countries. We closely monitor regulatory trends in Washington, Brussels, Ottawa, Brasilia, London, and Geneva. Find out more at www.consumerchoicecenter.org