President Donald Trump vowed a 25% tariffs on imports from Mexico and Canada will take effect on March 4, ending weeks of uncertainty. His confirmation sent Wall Street’s S&P 500 tumbling 2% in afternoon trading, the Associated Press reported.
The move reignites fears of a North American trade war as businesses brace for higher costs.
“They’re going to have to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs,” Trump said at the White House.
While Trump framed the tariffs as a response to fentanyl trafficking and illegal immigration, he also cited trade imbalances and the need to bring manufacturing back to the U.S. Meanwhile, his initial 10% tariff on Chinese goods is set to double to 20%.
After granting a one-month delay in February while Mexico and Canada sought concessions, Trump told reporters there was now “no room left” to avoid the tariffs. However, Canadian energy products like oil and electricity will face a lower 10% rate, reported the Associated Press.
Trump’s tariff announcements have already prompted some brands to delay product launches and reassess their U.S. market strategies, ADWEEK previously reported. While most agencies are taking a wait-and-see approach, marketers with ties to the U.S.’s top three trade partners are facing heightened uncertainty.
