Article

Thursday, March 06, 2025
search-icon

Businesses scramble to contain fallout from Trump’s tariffs on Canada, China and Mexico

publish time

06/03/2025

publish time

06/03/2025

RPMH101
In this image made from video, Whiskeyjack Boutique owner Katie Stokes holds up a shirt for sale at her gift shop on March 4 in Windsor, Ontario. (AP)

WASHINGTON, March 6, (AP): A Minnesota farmer worries about the price of fertilizer. A San Diego entrepreneur deals with an unexpected cost increase of remodeling a restaurant. A Midwestern sheet metal fabricator bemoans the prospect of higher aluminum prices. Businesses knew that Trump’s import taxes -- tariffs -- on America’s biggest trading partners were scheduled to take effect Tuesday.

But many of them assumed they’d get a reprieve. After all, the unpredictable president had delayed the tariffs on Canada and Mexico for 30 days right before they were originally supposed to kick in on Feb 4. No such luck this time. At midnight Tuesday, the United States imposed 25% tariffs on goods from Canada and Mexico, starting a trade war with its closest neighbors and allies.

Trump also doubled his 10% levies on Chinese imports in a series of moves that took US tariffs to the highest level since the 1940s. Canadian energy was shown some mercy, getting taxed at a lower 10%. The three countries promptly announced retaliatory tariffs of their own. Commerce Secretary Howard Lutnick said later on Tuesday that the US would likely meet Canada and Mexico "in the middle,” with an announcement coming as soon as Wednesday.

Lutnick told Fox Business News the tariffs would not be paused, but that Trump would reach a compromise. The longer the tariffs stick, the more damage they can do, forcing companies to decide between eating higher costs and passing them along to inflation-weary consumers. If the tariffs and the retaliation last a year, economist Kathy Bostjancic of Nationwide estimates, US economic growth will be more than 1 percentage point lower and inflation 0.6 percentage points higher than they would have been otherwise.

Manuel Sotelo, who runs a Mexican truck fleet that carries goods across the southern US border, didn’t expect that Trump would roll the dice on $2.2 trillion worth of American trade with Mexico, Canada and China. "I really did think last afternoon or last night Trump would have reversed course,’’ Sotelo, who has a Trump bobblehead behind his desk, said Tuesday.

That's in no small part because Mexico has already taken steps to address the ostensible grievances behind Trump’s Tuesday tariffs - the flow of illicit drugs and immigrants - including sending 10,000 troops to the border. But the president went ahead with the tariffs, and now businesses are scrambling to deal with them. David Spatafore, who owns several restaurants in San Diego, said his businesses have already been pummeled by the surging price of eggs and dairy over the last month. Tuesday’s tariffs are just the latest blow. "Everything across the board is impacted,” Spatafore said.