Trump administration is regulated to slap tariffs on products from Mexico, Canada and China, which are the three largest US trading partners. This step can affect the price for everything, ranging from gasoline to avocados to the iPhone.
President Donald Trump set March 4 as a start date for a 25% tariff for imports from Mexico and Canada, as well as an additional 10% rate for Chinese goods.
Speaking at the White House on Monday afternoon, Trump confirmed that the tariff will apply the next day.
Announcement sending the main stock index plummeted. S& P has suffered the biggest loss since December, closed at 5,849.72 – down 104.78 points or 1.76%. Dow Jones Industrial Average closed at 43,191.24 down 649.67 points or 1.48%, while Nasdaq technology weight dropped 2.64%.
The deadline arrived one month after Trump gave Mexico and Canada the suspension of sentences from the tariff, after reaching an agreement with the two countries regarding border security and drug trafficking.
This is what must be known about the tariff that will start applying on Tuesday.
Rates can generate US trade – unless it does not happen
In recent days, Trump reiterated his commitment to place tariffs in Canada and Mexico.
In various statements, Trump said he intended to advance with the policy. On Thursday, Trump accused that drugs continued to enter the US through Mexico and Canada despite last month’s agreement to overcome this problem.
“We cannot let this scourge continue to endanger the United States, and therefore, until it stops, or is very limited, the proposed tariff is scheduled to take effect in fourth March, indeed, will begin to apply, as scheduled,” Trump said in A post on social truth.
Trump voiced a similar concern about Mexico and Canada before the previous tariff deadline before finally stopping these steps.
Trade Secretary Howard Lutnick on Monday praised Mexico and Canada for their new efforts to overcome border security, showing that the rate of tariff remains uncertain.
“[Trump] Will decide today – we will issue it tomorrow, “said Lutnick CNNDescribe policy making as a “liquid situation.”
On Monday afternoon, Trump confirmed that the new tariff round will apply the next day.
“It will begin,” Trump said. “They must have a tariff.”
New rates can increase prices for some important things
Tariffs in Mexico, Canada and China can raise prices for a large number of goods, experts previously told ABC News.
This size is likely to increase the price paid by US buyers, because importers usually deliver part of higher tax costs to consumers, experts said. This policy can increase prices for products ranging from tomatoes to tequila to car parts.
President Donald Trump listened when he met with Ukraine President Volodymyr Zelenskyy at the White House Oval Office in Washington, DC, February 28, 2025.
Saul Loeb/AFP Via Getty Images
The higher cost for car production can cause challenges for US car makers, many of which depend on supply chains that are closely related to Mexico and Canada.
“The car sector, in particular, is likely to see a significant negative consequences, not only due to supply chain disturbances that permeate three countries in the manufacturing process, but also because of the expected increase in vehicle prices, which can reduce demand,” Gustavo Flores-Macia, a government professor and public policy in Cornell, told ABC.
Mexico and Canada contributed 70% of the import of US crude oil, which is the main input for the supply of the country’s gasoline, according to him AS ENERGY INFORMATION ADMINISTRATIONgovernment agent.
Trump previously said Canadian energy resources such as oil and gas would be subject to a 10% tariff, not including products from 25% of the tariffs faced by all other imports from the country.
The US imports $ 38.5 billion in agricultural goods from Mexico in 2023, making it the top recipient of the product, US Agriculture Department Data shown. The import covers more than $ 3 billion pieces and fresh vegetables.
About 90% of avocados eaten in the US last year came from Mexico, USDA data showed. Other products with high concentrations of Mexican imports including tomatoes, cucumbers, paprika, jalapeno, lime and mango.
Targeted countries can reply
Fresh rates can trigger retaliation from Mexico, Canada and China.
To anticipate last month’s tariffs, Canadian Prime Minister Justin Trudeau threatened the rate of retaliation of goods worth $ 155 billion and urged Canadians to choose Canadian products rather than their American colleagues.
Mexican President Claudia Sheinbaum said he had instructed officials in his government to implement plans B, “which includes tariff and non-tariff steps to defend the interests of Mexico.”
Speaking to reporters on Monday, Sheinbaum said that the new conversation between the US had been “very good” but Mexico maintains the option if necessary.
“We will wait and see what happens,” Sheinbaum said. “In that case, you must have courage, calm and patience, and we have plans A, plan B, C plan, D plan, so we will wait today.”
ABC News’ Anne Flaherty contributed to this report.