➤ Over the last six weeks, President Donald Trump has threatened – and then paused – tariffs on Canada and Mexico several times. The threats and pauses are confusing and worrying countries and businesses around the world.
Over the last six weeks, US President Donald Trump has threatened – and then paused – tariffs on Canada and Mexico several times. The threats and pauses aren’t only confusing Canada and Mexico. They’re also confusing and worrying countries and businesses around the world.
Tariffs
A tariff is a special tax that is charged when a product enters a country (the US, for example) from another country (China, for example).
Tariffs are normally used to protect special areas of business inside a country, especially against a country that is selling things too cheaply. For example, if one country is selling solar panels too cheaply, companies that make solar panels in the other country could go out of business because their solar panels cost too much.
Tariffs are usually only put in place after lots of careful thought. And countries don’t normally threaten tariffs against their allies.
On his first day in office, Mr. Trump promised to put tariffs on Canada and Mexico. These countries aren’t just neighbors of the US. They are strong allies. On February 1, huge 25% tariffs on both countries were made official. Mr. Trump also put a 10% tariff on products from China. Two days later, Mr. Trump paused the tariffs on Canada and Mexico for one month.
Mr. Trump then promised that the tariffs would start on March 4. Canada and Mexico, in turn, all promised their own tariffs against the US. China had already put tariffs on some US products.
Last Tuesday, March 4, 25% tariffs were again put in place on all products coming into the US from Canada and Mexico. An extra 10% tariff (for a total of 20%) on China also began. The following day, Mr. Trump paused the tariffs on cars from Canada and Mexico for a month. The next day, March 6, he again paused tariffs on many other products from Canada and Mexico, until April 2.
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On March 4, 25% tariffs were put in place on products coming into the US from Canada and Mexico. The following day, Mr. Trump paused the tariffs on cars from the two countries. The next day, he paused tariffs on many other products from Canada and Mexico. Above, a truck carries cars into the US from Canada on March 8.
Tariffs aren’t simple. They are complicated and affect many people and businesses in both countries. Businesses need to plan ahead for the materials and products they need, and the money they’ll need to pay for them. When the countries involved are as large as the US, China, Canada, and Mexico, tariffs also have effects around the world.
Mr. Trump has said he’s considering tariffs against the European Union. He has also discussed possibly creating a 20% tariff on all products entering the US – no matter what country they come from. A 25% tariff on all steel and aluminum coming into the US is expected to begin on March 12.
Experts say that Mr. Trump’s tariffs will lead to higher prices for people and businesses in the US.
But there are other costs, too. Mr. Trump’s rapid changes in tariff plans have left many people confused. And they’ve made it hard for businesses – and countries – to plan for the future. Those business problems are showing up in the US, too, as companies struggle to adjust to the constant changes.
There’s not much sign that Mr. Trump will stop changing his mind. On Friday, the day after he paused the 25% tariffs on Canada and Mexico, Mr. Trump said he was considering a tariff of up to 250% on wood and dairy products from Canada.