President Trump said he will follow through with 25% tariffs on imported goods from Mexico and Canada beginning Tuesday and double tariffs on goods from China to 20%.
“The tariffs, they’re all set. They go into effect tomorrow,” Mr. Trump told reporters Monday.
Mr. Trump said he would proceed with the tariffs after announcing a deal with Taiwan Semiconductor Manufacturing Co., which plans to spend at least $100 billion on five semiconductor chip factories in the U.S., mainly in Arizona, to avoid the looming tariffs.
“The most powerful AI chips in the world will be made right here in America,” Mr. Trump said. “We will be at close to 40% of the market with this transaction and a couple of others that we are doing.”
Mr. Trump’s decision to move forward with the tariffs sent the Dow Jones Industrial Average tumbling 650 points, or 1.5%. Economists warned that the additional duty on foreign goods would raise consumer prices and shrink economic growth.
Mr. Trump insisted the opposite. He touted the TSMC deal as proof that the tariffs will bring back revenue and manufacturing jobs that the U.S. lost from decades of trade imbalances with other countries.
He said the semiconductor deal will bring up to 25,000 jobs.
Hours before Mr. Trump disclosed the semiconductor deal, Honda announced it would manufacture its new Civic hybrid in Indiana. Honda will move the work from Mexico to the U.S. to dodge Mr. Trump’s 25% tariff on Mexican goods, which was set to begin at midnight Monday.
“Tariffs are easy, they are fast, they are efficient and they bring fairness,” Mr. Trump said.
Retaliation against the tariffs could begin quickly.
The Toronto Sun reported Monday that Ontario Premier Doug Ford vowed to stop electricity exports into the United States if the tariffs are implemented.
The U.S. and Canada share an integrated power grid, and Canada is the largest source of U.S. energy imports. Ontario exports electricity to 30 states, including Michigan, Minnesota and New York.
“They rely on our energy, they need to feel the pain. They want to come at us hard, we’re going to come back twice as hard,” Mr. Ford said.
Mr. Trump promised additional tariffs on agricultural imports on April 2. In a social media post, he told U.S. farmers about increased demand for domestic farm products.
“Get ready to start making agricultural product to be sold INSIDE the United States,” Mr. Trump posted on Truth Social. “Tariffs will be on external product on April 2. Have fun!”
Mr. Trump has pledged reciprocal tariffs on European Union nations.
The president initially threatened the Canada and Mexico tariffs in response to fentanyl pouring over the southern border and, to a much lesser extent, over the northern border. He paused the tariffs in February after both countries announced plans to beef up border security and measures to combat drug trafficking.
As Mr. Trump announced plans to proceed with the tariffs on goods from Mexico and Canada, his official rapid response team posted on social media that fentanyl killed 70,000 people in the U.S. last year. Much of the drug is produced in Mexico using chemicals bought mainly from China and is trafficked into the U.S. by powerful Mexican cartels.
“No room left” for Canada, Mexico or China to escape tariffs, Mr. Trump said.
He is eager to equalize U.S. trade with Canada and Europe. He complains that other countries’ trade policies are unfair to the U.S.
Canada imposes steep tariffs on many U.S. goods, including dairy and other agricultural products, lumber, metals and shoes.
The European Union has imposed significant tariffs on U.S. goods, including automotive products, motorcycles, plastics and aircraft.
“The United States has been taken advantage of for 40 years,” Mr. Trump said. “The United States has been a laughingstock for years and years.”
The tariffs have attracted significant criticism from economists and tax analysts who say they will eat into paychecks and harm economic growth.
Erica York, the Tax Foundation’s vice president of federal tax policy, said the China, Mexico and Canada tariffs amount to a $130 billion annual tax increase on Americans, or about $1,000 per household, and will reduce incomes by 1.2% this year.
Some estimates suggest that auto prices could soar by $12,000 because parts are manufactured in Mexico and Canada.
“What they are going to have to do is build their car plants and other things in the United States,” Mr. Trump said. “In which case, you have no tariffs. They are much better off building here. We have the market where they sell the most.”
• Susan Ferrechio can be reached at sferrechio@washingtontimes.com.
Please read our comment policy before commenting.