Trump Finalizes Tariffs On Canada, Mexico, China, Triggering Possible Trade War

President Donald Trump took action Saturday to impose new tariffs on Canada, Mexico and China, the White House said, which could have a sweeping impact on the American economy.

The additional tariffs on Canadian and Mexican goods will be 25 percent, although only 10 percent on Canadian energy. The new tariff on Chinese goods will also be 10 percent, as Trump indicated earlier.

The move sets the stage for a possible North American trade war that economists say could hurt economic growth on the continent and increase inflation.

The White House issued the tariffs after failing to resolve Trump's concerns with the three countries over fentanyl trafficking, undocumented migration and the U.S. trade deficit.

Together, Canada, Mexico and China accounted for about $1.3 billion worth of U.S. imports last year, or about 40 percent of the $3.2 billion in goods that American companies and consumers purchased from around the world.

The countries are also the top three markets for U.S. agricultural exports, putting U.S. farmers on the front line of expected retaliation.

Trump’s move, coming one week after a tariff showdown with Colombia, is further confirmation of the president’s belief that tariffs are a powerful tool he can use to force other countries to bend to his demands.

That combative approach — which supporters call “tariff diplomacy” — has rattled trading partners around the world, along with his threats to impose a universal tariff of 10 or 20 percent on all U.S. imports — and potentially even higher tariffs on key sectors like semiconductors, pharmaceuticals and oil and gas.

However, those potential moves appear less motivated by a desire to change other countries’ policies, than to raise new tax revenue and provide a protective buffer for U.S. industry in the hope of increasing domestic manufacturing jobs.