By Joe Light and Brian Swint

President Donald Trump on Friday confirmed that tariffs on Mexico, Canada, and China are coming this weekend. In comments to reporters at the White House, Trump said that chips, pharmaceuticals, steel, aluminum, and copper will be among the targets.

Earlier in the day, White House Press Secretary Karoline Leavitt said the president plans to implement 25% tariffs on Canada and Mexico, as well as 10% tariffs on China, adding that the levies are a response to the countries failing to stop the flow of fentanyl and illegal immigrants into the U.S. She denied an earlier report from Reuters that said the tariffs won't take effect until March 1.

White House advisers are still negotiating the particulars of the tariffs. Trump on Thursday suggested some goods, like oil, could be exempt, though on Friday he said oil might instead have a reduced tariff of around 10%.

Leavitt said she didn't have an update on exemptions. During her press conference, which began at 1 p.m. Eastern, shares of some Canadian energy companies and banks fell. Cenovus Energy dropped about 1.5% to $14.63 between the start of the conference and 2 p.m., while shares of Royal Bank of Canada fell 0.7%.

Responding to a question about whether he will impose tariffs on the European Union at some point, Trump said "absolutely."

The breadth of the levies will have a big impact on companies from auto makers to home builders. Mexico and Canada are the U.S.'s largest trading partners, with a combined $1.8 trillion of trade in goods and services. A 25% levy on Mexico could potentially increase tariffs by about $131 billion annually, according to a report earlier this month by PwC, while the Canada tariffs would raise the taxes by $106 billion.

According to PwC, the products experiencing the biggest impact from the Mexico tariffs would be auto vehicles and parts, while the Canada tariffs would hit vehicles and parts and crude oil.

But the final tally of this weekend's action might not be so straightforward. Trump in the White House on Thursday suggested to reporters that oil might be exempted. He complained about trade deficits with the countries, as well as China, but also suggested that he wants to extract concessions on issues like immigration and drug trafficking.

The president's focus on non-trade-related issues should make it easier for Mexico and Canada to negotiate a deal before tariffs go into place, wrote analysts for Capstone LLC earlier this week.

It's also not clear what authority Trump would try to draw on for the levies. One possibility is the International Emergency Economic Powers Act, which lets the president regulate some commerce in a national emergency. IEEPA is an attractive tool because it can be used quickly, but Trump would be the first president to use it for tariffs, which could spur legal challenges.

Other trade laws are often designed to target specific products and can take months to implement. Broad tariffs targeting all imports could even require a law from Congress, according to some legal scholars.

Markets are still on edge as investors wait for an announcement.

"The weekend will present the first test of how serious U.S. President Donald Trump is with his protectionism threat," said ING strategist Francesco Pesole. "The new administration's dealing of this U.S.-Canada-Mexico situation will likely be used by markets as a benchmark for Trump's trade policy moving ahead."

White House advisers will also be seeking to limit the pain felt by U.S. consumers. Trump's moves could disrupt delicate supply chains and fan inflation. The dollar and gold were rising, as were bond yields, on Friday.

Those moves can be traced to worries about inflation. The Federal Reserve may be forced to keep interest rates higher than otherwise if tariffs raise prices, which in turn impacts the dollar and yields. Gold is seen as a hedge.

Any move made by the White House would likely be met with reprisals by Mexico and Canada.

Canadian officials have plans for retaliatory tariffs designed to inflict the most pain on goods produced in Republican or swing states, the New York Times reported earlier this month.

Mexico President Claudia Sheinbaum at a news conference earlier this week said she didn't think Trump would move forward but added "If it does happen, we also have our plan."

Write to Joe Light at joe.light@barrons.com and Brian Swint at brian.swint@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 31, 2025 16:54 ET (21:54 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.