JUANA SUMMERS, HOST:
Last night, as he was signing a flurry of executive actions at the Oval Office, President Trump said he's thinking about imposing 25% tariffs on Canada and Mexico by February 1. Trump has long loved tariffs, but this move could set off a trade war with America's two closest neighbors - partners in a trade deal that Trump himself pushed for in his first term. NPR White House correspondent Asma Khalid joins us now. Hi there.
ASMA KHALID, BYLINE: Hi there.
SUMMERS: Asma start, if you can, by telling us more about what Trump is saying he's going to do.
KHALID: Trump, you know, sees tariffs as both a negotiation tactic and as a way to raise revenue. He had been threatening sweeping tariffs on Canada and Mexico, and trade experts thought he might do that on Day 1. But we didn't see that. Instead, he signed an executive action calling on a bunch of federal agencies to investigate existing trade policy and send him their findings by April. But last night, he also said this.
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PRESIDENT DONALD TRUMP: We're thinking in terms of 25% on Mexico and Canada because they're allowing vast numbers of people - Canada's a very bad abuser also - vast numbers of people to come in, and fentanyl to come in.
KHALID: And a reporter followed up and asked when he might enact those tariffs.
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TRUMP: I think February 1.
SUMMERS: Asma, I want to back up a bit if we can. He said he wants to do this because of, quote, "vast numbers of people," but what does he mean by that?
KHALID: He's saying he wants to do this to curb immigration and illegal drugs coming over the border. And Juana, this is not the first time he's tried this tactic. You might recall, back in his first term, Trump said he would put a tariff on all imports from Mexico until Mexico took steps to reduce illegal immigration. Mexico did take some steps, so Trump backed off his threat. And as we all know, immigration was a huge part of Trump's reelection campaign. A bunch of the executive actions that he signed yesterday are aimed at limiting immigration.
SUMMERS: Right. But as we said, there is a trade deal with these two countries.
KHALID: That's right. It's called the U.S.-Mexico-Canada Agreement, also known as USMCA, and it's a trade deal that the Trump administration signed when it was last in office, but the deal is up for review next year. I spoke to Kathleen Claussen about that. She's a professor at Georgetown who works on international trade law.
KATHLEEN CLAUSSEN: At this point, the Trump administration may be seeking to extract more from each of them in exchange for keeping the deal alive.
KHALID: So this also may be a negotiating tactic. You know, if history is any guide, this is a review that we're going to hear a lot about in the next couple of years.
SUMMERS: Oh, yeah. I mean, there's so much history here. I mean, I remember all of the back and forth with Canada and Mexico over trade in Trump's first term, and there were tariffs slapped on things like steel and lumber.
KHALID: And remember - Canada, they issued retaliatory tariffs on things like beef and bourbon. Mexico put tariffs on U.S. pork. There was a lot of tit for tat. Eventually, these tariffs were lifted, and a trade deal was struck. Canada and Mexico are among the United States' largest trading partners. You're talking about hundreds of billions of dollars. And so already, you're hearing about possible retaliation. Take a listen to Anita Anand, one of Canada's key cabinet ministers, on CTV television over the weekend.
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ANITA ANAND: We have planned multiple rounds of counter-tariffs against the United States, which we will not hesitate to use if necessary.
KHALID: Canada hasn't spelled out a plan in public, but the United States relies on a lot of oil and gas from Canada.
SUMMERS: Asma, one thing before we let you go - I'm hoping you can just take a step back quickly. Help us understand what it would mean if these tariffs go into effect.
KHALID: Yeah. You know, Trump talks about these tariffs as taxes on other countries, but the tariffs are paid by American companies that import those goods. They often pass along the costs to their customers. Most economists say that tariffs actually end up as taxes on consumers, and some warn that if Trump goes through with this all, it could lead to higher inflation here at home.
SUMMERS: NPR's Asma Khalid, thank you.
KHALID: Good to speak with you. Transcript provided by NPR, Copyright NPR.
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