Trump's tariffs on Mexico and Canada planned for Tuesday; China tariffs to double

DETROIT (FOX 2) - President Donald Trump announced on Truth Social that his planned tariffs against Canada and Mexico are going to go into effect on Tuesday, a month after a temporary agreement to halt the import taxes – and that he would double the 10% tariff on China as well.

Trump posted on Thursday, saying that drugs like fentanyl are being smuggled into the U.S. at "unacceptable levels" and tariffs would force countries to crack down on trafficking.

"We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled," the Republican president wrote. "China will likewise be charged an additional 10% Tariff on that date."

The backstory:

Trump declared an economic emergency in early February in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada.

Both Canada and Mexico ordered retaliatory tariffs ahead of the original date of Feb. 3. However, on Feb. 3, the Mexico and Canada tariffs were put on hold for 30 days as the two U.S. neighbors agreed to boost border security efforts.

As of 1 p.m. on Thursday, neither Canadian Prime Minister Justin Trudeau or Mexican President Claudia Sheinbaum have responded.

US President Donald Trump holds a cabinet meeting at the White House in Washington, DC, on February 26, 2025. (Photo by Jim WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images)

What is a tariff?

Big picture view:

Tariffs are taxes imposed on imported goods that are paid by the importer. The purpose of a tariff is to raise the price of imported goods and services to discourage consumption and get people to purchase more local products to stimulate the nation's economy.  

The idea is to encourage more local production so that imported goods can be replaced by domestic products, raising revenue for the government. 

According to a report featured in the Journal of Economic Perspectives, it is common for U.S. presidents to introduce protectionist measures — like heavy tariffs — early on in their terms. 

In 2018, Trump imposed tariffs on $283 billion of US imports in 2018, with rates ranging between 10% and 50%. In response, several countries including China, Russia, Canada, Mexico and the EU all filed cases against the U.S. with the World Trade Organization. Many of those countries also retaliated with tariffs of their own.

How Michigan could be impacted by tariffs

What they're saying:

Michigan's auto industry, farmers, and the state's budget surplus could all take a financial hit.

Governor Gretchen Whitmer said during her State of the State on Wednesday that the tariffs could be extremely hazardous for the state's economy.

"Industry leaders and top economic minds on both sides of the aisle are warning us about the havoc that 25% tariffs would wreak on Michigan's auto industry," Whitmer said.

The Democratic governor said tariffs can help but not if they are implemented in this way.

Whitmer says it could cost, on average, an extra $1,200 for groceries and gas, alone.

"As I've said before, I'm not I'm not opposed to tariffs outright, but they are a blunt tool. When the Michigan economy is on the line, 25% tariffs on everything would slow down construction, shutter small businesses, lead to layoffs in the auto industry, and cost Michigan families an extra $1,200 a year at the store and at the pump because companies will pass their higher costs onto the consumer," Whitmer said.

Dig deeper:

For the auto industry, the federal government will impose a tax on every auto part that comes in to the U.S. from Canada or Mexico. Those parts wind up on the assembly line and, as the part goes up, so does the cost of the car.

Once the vehicle is complete, the cars go on the lot and it's going to lead to sticker shock. As buyers turn away, that means fewer sales and, eventually, lower profits.

Michigan farmers are already worried about losing migrant farmworkers under the President's aggressive deportation round-up . The tariffs could impact the price of everything at the store, according to Chuck Lippstreau from Michigan's Agri-Business Association, who spoke with FOX 2 last month.

"Tariffs on agriculture and products and food will ultimately lead to price increases. That is a concern that every Michigan family should be aware of," Lippstreau said.

Farmers worry that will lead to less food to sell, meaning lower sales and profits.

"That does hurt the farmers' opportunity to be successful and grow their economy long term," Lippstreau said.

The third potential loser in all this are Michigan citizens. Fewer dollars flowing into state coffers means fewer dollars for state services and programs.

Whitmer has already indicated that her new budget could be reduced and the state's hefty surplus may evaporate.