U.S. President Donald Trump said Monday that tariffs on imports from Canada and Mexico "will go forward" as a month-long pause ends in March, despite concerns the levies could potentially hurt economic growth and worsen inflation.
"We're on time with the tariffs, and it seems like that's moving along very rapidly," Trump said at a White House news conference with French President Emmanuel Macron.
While Trump was answering a specific question about the taxes to be charged on America's two largest trading partners, the U.S. president also stressed more broadly that his intended "reciprocal" tariffs were on schedule to begin as soon as April.
"The tariffs are going forward on time, on schedule," Trump said.
Trump has claimed that other countries charge unfair import taxes that have come at the expense of domestic manufacturing and jobs. His near-constant threats of tariffs have already raised concerns among businesses and consumers about an economic slowdown and accelerating inflation. But Trump claims that the import taxes would ultimately generate revenues to reduce the federal budget deficit and new jobs for workers.
"Our country will be extremely liquid and rich again," Trump said.
In an interview with Fox News late Monday, Macron said he hoped he had convinced Trump to avoid a possible trade war, noting the difficulty of taking on a traditional ally such as Europe while simultaneously using tariffs to challenge China's industrial might.
"We don't need a trade war," Marcon said. "We need more prosperity together."
Most economists say the cost of the taxes could largely be borne by consumers, retailers and manufacturers such as auto companies that source globally and rely on raw materials such as steel and aluminum that Trump is already, separately, tariffing at 25%.
Still, Mexican President Claudia Sheinbaum appeared confident Monday that her administration would reach agreements with the U.S. government before the deadline set by Trump.
"We would need to be reaching important agreements this Friday," Sheinbaum told reporters Monday morning before Trump's remarks. "On all of the issues there is communication and what we need is to complete this agreement, I believe we're in a place to do it."
If necessary, she said she would seek to speak directly with Trump again. In high-level discussions between both governments, Mexico has insisted that the U.S. also take a hard look at the drug distribution and consumption in its own country rather than pointing only at production in Mexico, Sheinbaum said.
Companies like Walmart have warned about uncertainty, while the University of Michigan's latest consumer sentiment index plunged by roughly 10% over the past month in part due to fears about tariffs and inflation worsening.
In the 2024 presidential election, voters backed Trump on the belief that he could cool inflation that had spiked to a four-decade high in the aftermath of the COVID-19 pandemic during President Joe Biden's time in office.
But Trump has persistently threatened tariffs and kept up those calls even as Macron, standing beside him, had previously suggested that trade talks had produced some common ground.
"We want to make a sincere commitment towards a fair competition where we have smooth trade and more investments," Macron said at the news conference, according to a translation of his French remarks.
Macron said the idea is to help the U.S. and Europe both prosper, saying that further talks would be carried out by their respective teams to flesh out their ideas.
Investors, businesses and the broader public are still trying to determine whether Trump is merely threatening tariffs as a negotiating tool or if he sincerely backs the tax hikes as a way to offset his planned income tax cuts.
Despite talks the Trump administration has held with Canadian and Mexican officials, the U.S. president signaled Monday that he would end the 30-day suspension of tariffs that were initially set to take effect in February. Trump plans to tax imports from Mexico at 25% as well as most goods from Canada, with energy products such as Canadian oil and electricity being tariffed at a lower 10%.
Trump is placing tariffs on Canadian and Mexican goods with the stated goal of pressuring them to do more to address illegal immigration and the smuggling of illicit drugs such as fentanyl. While relatively little fentanyl comes from Canada, the country announced a czar to address the issue and appease Trump in addition to existing measures. Mexico has relocated 10,000 members of its National Guard to the border with the United States in addition to existing measures.
Trump also plans to impose new tariffs to match the rates charged by other countries. Set to begin as soon as April, the tariffs could be higher than what other countries would charge as subsidies, regulatory barriers and the value-added tax – which is akin to a sales tax common in Europe – would be included in the calculations.
The possibility of retaliatory tariffs planned by Canada, Mexico and Europe could lead to a broader trade conflict that sabotages growth. In February, the Yale University Budget Lab estimated that the Canadian and Mexican tariffs could depress average U.S. incomes by $1,170 to $1,245 a year.
