Since President Donald Trump’s victory in November, businesses worldwide have been bracing for higher tariffs, a promise he made. However, nearly a week into his presidency, Trump has not enacted any new tariffs. There is a possibility that this may change, with a deadline of 11:59 p.m. ET on Saturday for him to impose a 25% tariff on Mexican and Canadian goods, and a 10% tariff on all Chinese goods.
Trump claims that these tariffs will be imposed to punish the nations, which he believes are responsible for helping people enter the US illegally and supply fentanyl to the country. White House Press Secretary Karoline Leavitt confirmed that the 10% tariff on China will be enforced on Saturday, but it’s unclear if this will happen for Mexico and Canada as well.
Wilbur Ross, Trump’s former Commerce Secretary, believes that the threat of blanket tariffs might be overstated. He expects exclusions for certain goods that are not manufactured in the US and advocates for a gradual approach with exclusions for specific items. Ross warns that exclusions can create opportunities for countries to circumvent the tariffs, calling it a game of “whack-a-moles.”
Other experts, like Treasury Secretary Scott Bessent, support a gradual approach, while Howard Lutnick, Trump’s Commerce Department nominee, endorses blanket tariffs. There are pros and cons to each approach, said Ross.
While Trump has previously followed through with tariff threats, such as last weekend’s attempt to impose steep tariffs on Colombia, there’s speculation that tariffs may be used as a negotiating tactic. As seen with the Colombian situation, the tariffs may be taken off the table after negotiations. For instance, Ross claims that European car companies built more production facilities in the US to avoid tariffs on their cars.
Ultimately, no one can predict what President Trump will decide to sign into law this weekend, but many experts believe he is leveraging fear of the unknown to achieve his goals.
