'Trade War' Ready to Roll Out: Trump Says U.S. Will Impose 25% Tariff on Mexico and Canada Starting February

The Day-1 tariff was not implemented when Donald Trump officially became the 47th U.S. president, but he said the Phase 1 tariff would arrive as soon as February, targeting Mexico and Canada.

President Trump said on Monday that he was considering imposing 25% duties on imports from Canada and Mexico starting February 1, in response to illegal immigration and fentanyl crossing into the U.S.

In a presidential memo, Trump directed the Commerce and Treasury Departments, as well as the U.S. Trade Representative, to investigate the economic and national security risks of large trade deficits and recommend appropriate measures, such as a global supplemental tariff or other policies, to address such deficits.

Mexico and Canada are among America's top three trade partners. Last year, the U.S. imported $475 billion worth of goods from Mexico and $418 billion from Canada, collectively accounting for 30% of the value of all the goods the U.S. exported, according to federal trade data.

Trump explained that he was considering a 25% tariff because the two countries were allegedly allowing vast numbers of people and fentanyl to cross into the U.S.

The president had previously vowed to impose tariffs of at least 10% to 20% on all imported goods, and 60% or higher on shipments from China.

When asked about tariffs on China, Trump pointed out that the extensive tariffs he imposed during his first administration were still in effect after former President Joe Biden largely left them in place. Regarding universal tariffs, Trump deferred, saying, "We may, but we're not ready for that just yet."

Trump said such measures would generate massive amounts of federal income as his administration works to rebuild American industry. He also mentioned that the funds would be collected by a new agency called the External Revenue Service.