by Meanwhile, an additional 10% tariff is being placed on China, effectively doubling the rate imposed last month
WASHINGTON — In a move that will have a dramatic impact on the cost of imported goods including furniture, the Trump administration has moved forward with imposing 25% tariffs on Mexico and Canada, while also increasing tariffs on Chinese-made goods by another 10%.
According to various news reports, China and Canada have immediately retaliated, a move that represents the first steps in what could turn into a much larger trade war. Mexico is expected to respond later today, according to The New York Times.
The China tariff doubles the rate imposed last month, adding 20% to an existing 25% tariff on China-made products, effectively raising the tariff on China exports to 45%.
The government said the tariffs are meant to stem the flow of illegal drugs, including synthetic opioids such as fentanyl into the United States. The administration said the tariffs also aim to stem the flow of these drugs from Canada and Mexico, as well as illegal immigration from Mexico.
“While President Trump gave both Canada and Mexico ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into our country, they have failed to adequately address the situation,” the White House said in a statement issued late Monday. “The flow of contraband drugs like fentanyl into the United States, through illicit distribution networks, has created a national emergency, including a public health crisis.”
It went on to say that the “government of Mexico has afforded safe havens for the cartels to engage in the manufacturing and transportation of dangerous narcotics, which collectively have led to the overdose deaths of hundreds of thousands of American victims.”
Meanwhile, it alleged that Canada-based drug trafficking groups “maintain robust ‘super labs,’ mostly in rural and dense areas in western Canada, some of which can produce 44 to 66 pounds of fentanyl weekly.”
“Last year’s northern border fentanyl seizures, though smaller than Mexico’s, could kill 9.5 million Americans due to the drug’s potency — proof of Canada’s growing role in this crisis.”
It also noted that fentanyl seizures at the northern border in the first several months of the current fiscal year are nearing what was seized in all of fiscal 2022.
“Both nations’ failure to arrest traffickers, seize drugs or coordinate with U.S. law enforcement constitutes an unusual and extraordinary threat to America’s security — demanding IEEPA (International Emergency Economic Powers Act) action to force accountability and protect American lives.”
China, Mexico and Canada are among the largest exporters of finished furniture to the U.S. market, shipping a combined $14.8 billion in products to the U.S. in 2023, according to Richmond, Virginia-based Mann, Armistead & Epperson.
China was the largest with $9.4 million in shipments. In comparison, Mexico and Canada shipped $3.2 billion and $2.2 billion respectively. Also in the Top 5 were Vietnam, with $8.6 billion in shipments and Italy with $1.3 billion in shipments.
The prior 25% tariffs on China dating back to 2018 have largely been absorbed in the marketplace, through a combination of concessions from manufacturers, suppliers and retailers as well as some price increases. However, the additional 20% tariffs could have a severe impact requiring either price increases or the shifting of sourcing to other countries such as Vietnam, Malaysia and India, for example, as many retailers will not be willing to bear the additional costs.
Other countries such as Italy and Turkey also stand to benefit as they continue to support a vibrant furniture manufacturing sector.
