Update: Tariffs on Mexico have been pushed back a month.
On February 1 President Trump issues tariffs on Canada, Mexico and China. The levies of 25% on Canadian and Mexican and 10% on Chinese goods will take effect February 4.
Here are some reactions from organizations:
National Association of Manufacturers
President and CEO Jay Timmons released the following statement on the executive orders imposing significant tariffs on imports from Canada, Mexico and China.
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge.
“At the same time, protecting manufacturing gains that have come from our strong North American partnership is vital. The success of President Trump’s landmark trade agreement, the United States-Mexico-Canada Agreement, has strengthened North American supply chains and bolstered economic power across the region, boosting jobs, wages and investments here in the United States.
“Thanks to this agreement, one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China that often engage in unfair trade practices.
“However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.
“We stand ready to work with President Trump to ensure a trade strategy that reinforces American strength—holding bad actors accountable while preserving the gains of the successful USMCA and advancing policies that sustain manufacturing growth here at home.”
The Vehicle Suppliers Association, MEMA
The organization released the following comments:
MEMA echoes the profound concerns expressed by sectors across the U.S. economy and reinforce our opposition to a 25% tariff on goods from Mexico and Canada which will place additional pressure on the supplier industry and impede the ability of supplier companies to grow, invest, and operate their businesses.
Such tariffs would have severe consequences for the U.S. vehicle supplier industry, jeopardizing American jobs, increasing costs for consumers, and undermining the highly integrated North American supply chain that is critical to U.S. competitiveness.
A Direct Threat to American Jobs and Manufacturing
The vehicle supplier industry is the backbone of U.S. manufacturing, supporting over 930,000 American jobs. Tariffs of this magnitude would drive up costs for manufacturers, reduce investment in U.S. production, and force job losses across the industry. The United States-Mexico-Canada Agreement (USMCA), negotiated by President Trump and supported by MEMA, was designed to provide certainty and promote regional manufacturing. These tariffs will undermine this critical framework, creating economic uncertainty and deterring growth.
Higher Costs for Manufacturers and Consumers
A 25% tariff would significantly increase the cost of essential vehicle components, with those added costs inevitably passed down to consumers. At a time when inflation remains a key concern, such tariffs would further strain household budgets and disrupt affordability in the automotive sector. North American trade is already the largest U.S. export market, supporting millions of American jobs. Undermining this trade with costly tariffs would only weaken U.S. competitiveness and hinder economic stability.
Undermining Supply Chain Resilience and National Security
Canada and Mexico are the United States’ top automotive trade partners, forming the backbone of a resilient, North American-centered supply chain. Since the implementation of USMCA, regional trade has grown stronger, reducing reliance on China and reinforcing North American economic security. Tariffs would upend this progress, forcing companies to reevaluate supply routes and delay production, as well as discourage further investment in emerging technologies.
MEMA’s Call to Action
MEMA urges the administration to lift these tariffs and to prioritize policies that support American manufacturing, economic stability, and competitiveness. We encourage policymakers to work collaboratively with industry stakeholders to strengthen North American trade relationships rather than imposing punitive measures that would ultimately weaken a key sector of the U.S. economy.
The Conference Board
The organization issued the following comments.
The economic implications of tariffs are likely net negative, leading to weaker growth, higher inflation, and disruptions to global supply chains.
US GDP could take a hit: The combined effect of the Administration’s tariffs on what are the top three US trading partners could result in a 0.9 percentage point cut to the US’s real GDP growth over four quarters.
Growth also projected to be lower for targeted economies: -0.2% lower for real GDP growth in China, -0.9% Canada, and -1.2% for Mexico. (These projections do not take into consideration the retaliatory tariffs the three trading partners may implement for US exports.)
The cost of goods will increase: The Conference Board analysis shows US inflation increasing 0.6% over four quarters, due to these combined tariffs.
Little benefit to the federal coffers: The US federal revenue benefit of customs duties collected from these tariffs might add up to a relatively nominal $270 billion over the same period, which does little to pare the US’s $36 trillion public debt burden.
A broad swath of products will feel the bite: Together, goods from Canada, Mexico and China make up 41% of imports into the US, with an annual value of $1.4 trillion.
The tariffs impact a wide variety of consumer and business goods. Products heavily impacted include grocery items; oil and petroleum products; automobiles and parts; building materials such as steel and lumber; furniture; consumer packaging materials; electronics; and manufacturing inputs, including critical minerals.
Businesses should consider actions that include identifying alternatives for products and inputs; seeking exemptions from tariffs for critical products; and evaluating their supply chains for possible diversification and reorientation.
