President Donald Trump on Monday has said there’s nothing that can be done to prevent him from unilaterally enacting a 25 percent tax on anything Americans purchase that has been imported from Canada or Mexico tomorrow out of his mistaken belief that foreign countries pay tariffs rather than importers and consumers.
Speaking at an event to celebrate a $100 billion investment in American semiconductor manufacturing by the Taiwanese chip giant TSMC, Trump told reporters there was “no room left” for negotiations with Ottawa or Mexico City over the import taxes, which will “go into effect tomorrow.”
He justified the massive tax hike by what he called “vast amounts of fentanyl” that he claimed has :poured into our country from Mexico and Canada as well as China. He has already imposed a cumulative 20 percent tax on Chinese imports since taking office.
The tax increases are expected to hit Americans hardest at the grocery store given the significant amount of agricultural products that the U.S. imports from Mexico, as well as the large amount of fertilizer imported from Canada by American farmers.
Stock markets took a steep dive after Trump made his announcement, which came on the heels of the Atlanta branch of the Federal Reserve forecasting negative growth in America’s gross domestic product for the first quarter of 2025.
Mark Zandi, the chief economist at Moodys Analytics, wrote on X (formerly Twitter) that the American economy “appears to be gagging on the uncertainty created by the haphazard economic policymaking” in Trump-era Washington.
“Retail sales, manufacturing production, real consumer spending, home sales and most telling, consumer confidence, are all down meaningfully in the past month or two,” he said.
“Tariff wars, DOGE cuts to jobs and government programs and agencies, and deportations are sowing confusion, which puts a pall on investment, hiring and spending. Even the Fed says it has put interest rate policy on hold until it gets some clarity about where economic policy is going. That may not be for a while as a government shutdown is looming, and another scary Treasury debt limit drama is sure to play out this spring. Lawmakers need to get it together soon, or the economy will go from gagging to choking,” Zandi added.
Trump has long been a believer in the power of tariffs to bring what he calls “great wealth” into the American economy even though most reputable economists say the hamper growth by putting artificial barriers on trade.
The president also has continued to inexplicably claim that tariffs, which are import taxes paid by importers within the United States and passed on to consumers in the form of higher prices, are paid by foreign governments as if they are fees charged for the privilege of accessing American markets.
During an Oval Office meeting alongside U.K. Prime Minister Sir Keir Starmer on Thursday, Trump claimed that the U.S. would “charge” other countries tariffs in a reciprocal manner.But when The Independent pressed on this diversion between his rhetoric and the fact that the tariffs are charged to Americans, he replied: “I think they’re paid for it by the country.”
He also claimed that the Chinese government “paid us hundreds of billions of dollars” due to tariffs during his first term even though those tariffs were paid by importers and ultimately by consumers within the United States.
Pressed further on why he believes foreign countries pay taxes that are levied on American entities during a press conference alongside Starmer later that day, Trump said the economy had not been harmed by his “massive tariffs on China” during his first term.
“I use tariffs to even things up, and in particular with China, we took in hundreds of billions of dollars, and we had no inflation,” he said.
