President Trump has officially signed an executive order imposing tariifs on Canada, Mexico, and China effective Tuesday,
The U.S. will impose a 25% levy on imports from Canada and Mexico, a 10% tariff on energy products from Canada, and an additional 10% tariff on China.
The White House is using the International Economic Emergency Powers Act (IEEPA) to impose tariffs, citing the fentanyl crisis and illegal immigration.
Tariffs will remain until the trade partners eliminate fentanyl trafficking and reduce illegal immigration. No precise “metric” except that Americans stop dying from fentanyl and there is a “dramatic” drop in border crossings.
No immediate exemptions and there is a retaliation clause that increases U.S. penalties if Canada, Mexico, or China impose counter-tariffs.
Cover over $1.3 trillion worth of goods (based on 2023 import figures), more than double the value of Trump’s first-term China tariffs
Canada and Mexico each have signaled they would counter with retaliatory tariffs.
Trump indicated additional sector-based tariffs could follow on computer chips, pharmaceuticals, steel, aluminum, copper, oil, and gas, and possibly higher duties on the European Union.
Trade experts note that relying on IEEPA for tariffs is unprecedented and could face legal challenges, though courts often defer to presidential authority in national-security or emergency contexts.
President Donald Trump imposed a flat 25% tariff on all steel and aluminum imports with no country exemptions.
The new tariffs apply to Canada, Brazil, Mexico, South Korea, and other nations that previously had exemptions or quota deals.
The tariffs will now also cover downstream products, such as fabricated structural steel and aluminum extrusions. Targeting circumvention tactics by Russia and China.
Trump threatened retaliatory tariffs on countries that impose high duties on U.S. goods, targeting autos, semiconductor chips, and pharmaceuticals.
In 2019, after his first round of tariffs, US. manufacturing jobs declined**, and industrial production fell.
Trump signed executive order on reciprocal tariffs
Directs the administration to propose country-specific tariffs
Reflects a shift from broad-based levies to more targeted measures
Aims to offset perceived disadvantages facing U.S. exporters: Tariffs on U.S. goods, subsidies for foreign industries, VATs, exchange-rate concerns, Intellectual property issues
Howard Lutnick, nominee for Commerce Secretary, suggests proposals could be ready by early April
Reciprocal tariffs could be imposed in a number of ways: They could be applied to specific products, to entire industries, or as an average tariff on goods arriving from a specific country.
President Trump confirms that the US will impose 25% tariffs on Canada and Mexico starting tomorrow, March 4th.
And apparently no more deals left: “No room left for Mexico or for Canada. No. The tariffs you know, they’re all set. They go into effect tomorrow.”
Trump also signed an Executive Order to raise tariffs on China to 20%. By comparison, it took Trump 2 years to raise tariffs this much on China during his first term.
I=8 Trump plans to grant exemption to automakers whose cars comply with the U.S.-Mexico-Canada Agreement
Trump’s administration is considering granting a one-month delay for tariffs on automakers whose cars meet the 2020 U.S.-Mexico-Canada Agreement’s (USMCA) rules of origin
However, automakers will have to demonstrate plans to invest in US to remain exempt.
The USMCA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, increased the regional value content (RVC) requirement to 75% from 62.5%
To facilitate a smooth transition to these stringent requirements, the USMCA provides an option for automakers to request an Alternative Staging Regime (ASR), allowing up to five years to fully comply with the new rules (compliance dateline is July 2025).
The White House, however, said the reciprocal tariffs will go into effect in April 02.
The screenshot below shows the automakers that currently meet the USMCA using ASR.
The exemption signals that Trump could consider exempting vehicles produced in North America from the tariffs in an effort to maintain the competitiveness of the region as desired by the Detroit automakers.
@Magaly, what do you think about this development?
I think is a positive development fow now, and it does suggest he is indeed only trying to get what he wants, but the fact is until april 2nd means he can come out on that day and say that tariffs will still go through similar to the last deal.
He is delaying tariffs on all under USMCA (which is the majority of goods 90-95% from Mexico. Canada not mentioned for now).
I=5 EU will impose counter-tariff on 26 billion euros worth of US good starting in April
The European Union said it will retaliate against Trump’s 25% tariff on Steel and Aluminum by imposing by imposing counter-tariff on 26 billion euros worth of US good starting in April.
The additional tariff imposed by Trump will affect €18 billion worth of goods while reimposing of suspended measures will affect €8 billion worth of goods.
The €26 billion of EU exports, corresponding to around 5% of the EU exports to the US and will result in US importers having pay to up to €6 billion in additional import tariffs.
Trump vows not to change the April 2 tariffs, calls Europe “nasty”
Trump says he’s not going to change his mind on April 2 regarding the reciprocal tariffs, calls EU “nasty”
“The European Union is very, very nasty,” he said. “They’re suing Google, they’re suing Facebook, they’re suing all of these companies, and they’re taking billions of dollars out of American companies.”
Treasury Secretary Scott Bessent said earlier that the administration is more concerned on the long-term health of the economy and markets, rather than short-term movements.
Trump threatened 200% tariff on alcoholic products coming from the EU in retaliation to the bloc’s 50% tariff on whisky.
S&P 500 shed 1.5% while Nasdaq dropped 1.9% on the Trump’s further tariff threats.
EU delays its counter-tariffs against US until mid-April, says there is limited progress on negotiations
EU delays its counter-tariffs against US until mid-April in order to assess which goods to hit and provide extra weeks for negotiations.
“We are now considering to align the timing of the two sets of EU counter-measures so we can consult with member states on both lists simultaneously, and this would also give us extra time for negotiations with our American partners,” European Trade Commissioner Maros Sefcovic told a hearing at the European Parliament.
Sefcovic said he has made little progress with the US counterparts in the negotiations, adding that the US priority seems to be to draw investment and re-industrialize.
“And currently they believe that the best way to do this is through the tariff policy. I hope that one day we will get to this discussion, but currently we are clearly not there,” he said.
“I don’t change. But the word flexibility is an important word,” he said. “Sometimes it’s flexibility. So there’ll be flexibility, but basically it’s reciprocal.”
The “flexibility” could be similar to what he offered automakers.
The Wall Street Journal reported on Sunday that the tariffs are likely to be narrow in scope and exclude some industry-specific duties such as duties on cars and microchips.
S&P 500 futures is up 0.9% while Nasdaq 100 futures is up 1.1% at the time of this reporting.
JPM’s cross-asset team says it might be too early to get bullish reiterating their call for a “rangebound” market between 5200 and 6000:
“Two weeks ago we turned tactically cautious on risk assets on increasing concerns from trade uncertainty into business sentiment, itself enough to lower sharply our expectation for US growth," with “clarity on trade tensions [not] imminent”.
“Despite the exemptions and delays in the tariffs announced so far, we estimate that the average tariff rate has already increased by 5% in the US (from 2% to around 7%), with a bias for a further increase to around 11% if broad reciprocal tariffs and 25% sectoral tariffs are effective,” they said, which will maintain US growth concerns and fuel the rotation "to the more structurally positive themes of China AI and Europe’s fiscal shift.”
As “less confrontational trade policies,” are “not our baseline scenario at this point," and with the “Trump put,” likely remaining far out of the money as evidenced by the "acceptance of an ‘adjustment phase’ for the US economy…, especially if that cost is perceived as temporary.” They estimate that level at around 5200.
Trump Announces 25 Percent Tariffs on Imported Cars
The tariffs will go into effect on April 3, and will apply to cars and trucks as well as key parts like engines, transmissions and electrical components that are shipped into the United States.
That includes vehicles from American brands whose automobiles are assembled outside of the country, including in Canada or Mexico.
Ursula von der Leyen, president of the European Commission, says in a statement that she deeply regrets the U.S. decision to impose tariffs on European automotive exports. She also says that Europe will “assess this announcement, together with other measures the U.S. is envisaging in the next days,” and will continue to seek a negotiated solution.
This will modestly impact GDP (auto industry 3-4% GDP), but have a higher impact on CPI (~7% weight from both new and used autos, another 3% auto insurance). According to Tax Foundation a -0.1% impact on GDP.
About ~45% of sold cars in the US are imported, nearly 60 percent of the parts in vehicles assembled in the United States.
The fact that so many of the cars sold into the United States are imported increases the risk that those tariffs are here to stay in my mind. (At least in a variation that forces manufacturers even more than currently to shift production into the U.S)
Trump talked long about helping the “forgotten men and woman” of e.g. the Rust belt and Vance is from Ohio championing their cause and wrote the famous book “Hillbilly Elegy” detailing their problems.
On the other side I think it might be impossible or unpopular to introduce such high tariffs all at once on an industry so reliant on imports as if implemented it will cause a shock to prices and consumers and bring the automotive industry into recession. I think it’s best if we examine the details of that in our automotive specific topics and cross link them + investigate more if tariffs could be truly here to stay to this extend. (Which is think is not likely due to the reason given?)
Cars and car parts are also one of the major imported good into the United States. I cannot look deeply into this myself right now but found that they accounted for 474billion in 2024 which is 14.5% of 3,267billions of imports.
Import/Export data per country and category can be found here.
