In a recent interview with Fox News, US President Donald Trump indicated that tariffs on Canadian and Mexican goods set to take effect on April 2 might increase. He acknowledged uncertainty around a potential recession, stating, “I hate to predict things like that,” while discussing ongoing trade adjustments.
Last month, Trump had announced a 25 per cent tariff on imports from Canada and Mexico, but its implementation was delayed. A temporary respite from these tariffs was granted to both nations; however, Trump has since opted to re-evaluate these delays, particularly concerning car manufacturers. Declaring his approach as a one-time action, he asserted that the situation would evolve “transition into April.”
He also threatened new tariffs on Canadian timber and dairy products, expected to come into effect at the beginning of April. Following the announcement of a temporary pause on most tariffs, Mexican President Claudia Sheinbaum chose to forgo retaliatory measures, while Canadian Prime Minister Justin Trudeau has opted to maintain Canada’s existing counter-tariffs in light of ongoing uncertainties which could potentially trigger a trade war.
Trump’s administration claims trade measures, particularly on Canadian dairy and lumber, stem from issues related to the opioid crisis, with US officials alleging that Canada is a significant source of fentanyl. Despite this, statistics indicate Canada accounts for only a minor fraction of fentanyl imports into the United States.
Trade tensions alongside signs of an economic slowdown have led to growing concerns about a potential recession. Recent data from The Conference Board highlighted a notable rise in consumer sentiment anticipating economic downturns. Economists, including Mark Zandi from Moody’s, have expressed apprehension about these changes under Trump’s administration, suggesting that falling consumer confidence could have dire consequences if it persists.
Trump concluded his remarks with a note of optimism about the future, suggesting that ongoing transitions would ultimately benefit American farmers, though the immediate economic landscape remains precarious. The next few months will be crucial in determining the trajectory of US trade relations and economic health amidst these tumultuous exchanges.