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Trump's Tariff Shifts: A Potential Trade War on the Horizon?

3/9/2025
President Trump hints at escalating tariffs on Canadian and Mexican goods while discussing the potential for a recession in 2025. Will his policies ignite a trade war?
Trump's Tariff Shifts: A Potential Trade War on the Horizon?
Trump's latest tariff shifts raise concerns about a looming trade war with Canada and Mexico amidst recession fears for 2025.

Trump's Tariff Strategy and Economic Predictions

In a recent interview on Fox News’ “Sunday Morning Futures With Maria Bartiromo,” President Donald Trump discussed the future of tariffs on goods imported from Canada and Mexico. He indicated that these tariffs, set to take effect on April 2, “could go up,” and he refrained from predicting whether the United States would face a recession in 2025. This uncertainty comes amid ongoing discussions surrounding trade policies between the neighboring countries.

Details on Tariff Implementation

In February, Trump announced a significant increase in tariffs, imposing a 25% tariff on imports from Canada and Mexico. Initially delayed for a month, these tariffs were set to be enforced on Tuesday. However, the President made a last-minute decision to pause tariffs on automobile imports for another month. On Thursday, he further adjusted his stance, delaying tariffs on goods covered by the USMCA free trade treaty until April. Trump remarked, “It’s a transition into April and after that, I’m not doing this. I told automakers, ‘Look, I’m going to do it this one time.’”

New Tariff Threats and International Reactions

In a surprising turn of events, Trump threatened to implement new tariffs on Canadian lumber and dairy products, which could go into effect as soon as Monday. Following Trump’s announcement of a one-month pause on most tariffs, Mexico’s President Claudia Sheinbaum opted to delay retaliatory tariffs. In contrast, Canadian Prime Minister Justin Trudeau confirmed that Canada’s retaliatory measures would remain in place, stating that these policies risk igniting a trade war between the two nations.

Commerce Secretary's Confirmation of Tariff Plans

Commerce Secretary Howard Lutnick confirmed on NBC’s “Meet the Press” that Trump’s proposed 25% tariffs on steel and aluminum imports will be implemented on Wednesday, along with tariffs on Canadian dairy and lumber starting on April 2. Lutnick indicated that the enforcement of these tariffs will continue until Trump feels “comfortable” with the flow of fentanyl from both countries. This sentiment was echoed by National Economic Council director Kevin Hassett during his appearance on ABC News’ “This Week.”

The Drug War vs. Trade War

Hassett emphasized that Trump’s fluctuating tariff strategy is part of a broader initiative aimed at combating drug trafficking rather than a traditional trade war. “What happened was that we launched a drug war, not a trade war, and it was part of the negotiation to get Canada and Mexico to stop shipping fentanyl across our borders,” he explained. Despite claims that Canada is a significant source of fentanyl imports, it only accounts for approximately 0.2% of illegal fentanyl entering the United States.

Concerns About Economic Stability

Amid rising trade tensions and signals of slowing economic growth, concerns about a potential recession are becoming more pronounced. When asked about the likelihood of a recession in 2025, Trump responded, “I hate to predict things like that. There is a period of transition because what we are doing is very big.” He added that this transition might take time but will ultimately benefit farmers and the economy.

Public Sentiment on Recession Risks

The Conference Board’s latest consumer survey indicates that the percentage of respondents anticipating a recession in the coming year surged to a nine-month high in February. Economist Mark Zandi of Moody’s noted, “The kinds of changes that are occurring under Trump are arguably unprecedented, and it’s making people very nervous.” He warned that if consumer confidence continues to decline over the next three months, it could spell disaster for the economy.

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