Josh Bode, Matthew Daly, Paul Wiseman, Associated Press
WASHINGTON (AP) – President Donald Trump on Monday said he expects to impose 25% tariffs on Canada and Mexico starting Feb. 1, without specifying plans to tax imports from China. .
President Trump made the announcement in response to questions from reporters while signing executive orders in the Oval Office on his first day back at the White House.
During his campaign, Trump threatened to raise tariffs on China to up to 60%, but appeared to soften his plans after a phone call with Chinese President Xi Jinping last week. He said on Monday further talks would take place with the world’s second-largest economy.
President Trump said, “I plan to meet with President Xi and have a phone call.”
President Trump is betting big that his executive actions will lower energy prices and curb inflation, and that tariffs will strengthen the economy rather than expose consumers to higher prices. But it’s unclear whether his order will be enough to spur economic growth with the lower prices he promised voters.
President Trump specifically blamed the inflation on the $1.9 trillion in pandemic aid that then-President Joe Biden provided in 2021, even though domestic output is near record levels. said that its policies had restricted oil drilling.
In his inaugural address, President Trump said, “The inflation crisis was caused by massive overspending.”
Monday’s order included opening Alaska’s Arctic National Wildlife Refuge to oil drilling and reducing regulatory burdens on oil and natural gas production. He also declared a national energy emergency in hopes of accelerating increases in electricity production in competition with China, which builds technologies such as artificial intelligence that rely on data centers that use large amounts of energy.
President Trump also gave federal agencies 30 days to figure out how they can help reduce the cost of housing, health care, food, energy and appliances, as well as ways to get more people into the workforce. He also signed a directive directing a review of the
Another bill he signed would allow social media platform TikTok to remain open for 75 days to find a U.S. buyer, rather than shutting it down.
President Trump also signed a bill requiring federal agencies to seek advice from the Treasury Department and the Department of Commerce on how to create an “External Revenue Service” that would review trade policy and collect trade-related duties and duties. did. The measure sets a series of April deadlines.
Still, Trump wanted to make clear in Monday’s speech that he is willing to tax imports.
President Trump promised in his inaugural address that tariffs would be imposed, even though trade penalties are currently paid by domestic importers and often passed on to consumers. He said he would have to pay. President Trump said late Monday that the tariffs would “make us rich as hell.”
A senior Canadian government official said the country intends to prepare for almost any possibility regarding the trade situation with the United States.
“Maybe he has decided to suspend the threat of tariffs on all countries. We’ll see,” said Canadian Finance Minister Dominic LeBlanc. “Mr. Trump’s previous missions have been unpredictable, so our job is to make sure we are prepared for any scenario.”
Overall, Republicans face many challenges in achieving their price-lowering ambitions. Although Biden managed to see inflation fall over the past two years, he leaves office with prices still rising faster than wages for the past four years.
A big driver of inflation is a persistent housing shortage, and with U.S. oil production already at record levels, producers face uncertainty about global demand this year. The Fed is technically a government agency tasked with keeping inflation at a target of about 2% annually. Its usual means, in addition to bond purchases and public communications, are the setting of short-term interest rates on interbank loans.
President Trump said natural resource production is key to lowering both pump and utility costs for American consumers.
Because energy prices permeate every part of the economy, increasing U.S. production of oil, natural gas, and other fossil fuels is critical to national security. President Trump, who has promised to restore America’s “energy dominance,” complained that the Biden administration had restricted oil and gas production in Alaska.
While President Trump has lamented natural disasters such as the Los Angeles wildfires, he has shown relative indifference to the way fossil fuels accelerate climate change. He said he would once again withdraw the United States from the landmark Paris climate change agreement, dealing a blow to efforts to combat global warming and once again alienating the United States from its closest allies.
Energy can affect prices, but it’s not the biggest part of a family’s expenses. According to Consumer Price Index weights, energy expenditures account for just 6% of spending on average, much less than food (13%) and housing (37%).
Inflation, which had been dormant for decades, resurfaced in early 2021 as the economy recovered with unexpected strength from the coronavirus lockdown. A surge in customer orders has overwhelmed the U.S. supply chain, causing delays, stockouts and soaring prices. Factories making computer chips, furniture and other products around the world are struggling to recover.
Republican lawmakers were quick to condemn the Biden administration’s $1.9 trillion pandemic relief package, but noted that inflation is a global phenomenon and that there are other factors besides U.S. policy. Inflation worsened further after Russia invaded Ukraine in February 2022, causing energy and food prices to rise.
In response, the Fed raised its benchmark interest rate 11 times in 2022 and 2023. Inflation has fallen from a 40-year high of 9.1% in mid-2022. However, the inflation rate has accelerated since September, reaching an annual rate of 2.9% in December.
Voters were unimpressed with progress in combating inflation and complained that prices remained more than 20% higher than four years ago, even though average weekly incomes had not kept up. The soaring food prices (up 27% compared to February 2021) were particularly damaging.
After his inaugural address, President Trump downplayed the importance of inflation in the 2024 election and suggested in remarks on Capitol Hill that voters care more about immigration because there are limited ways to talk about prices. .
“How many times can you say the price of apples has doubled?” Trump said.
Associated Press writer Rob Gillies in Toronto contributed to this report.
First published: January 20, 2025, 11:09 a.m. (EST)
