President Donald Trump’s recent threats to impose steep tariffs on Canada, Mexico, and China from Saturday (Feb 01) have left the world awaiting his next move. If enforced, these measures could trigger a global trade war.

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Confirming that Trump will move forward with his threats, White House spokeswoman Karoline Leavitt said, "I can confirm that tomorrow, the February 1st deadline that President Trump put into place at a statement several weeks ago continues."

During a speech from the Oval Office on Thursday (Jan 30), Trump said that he was ready to halt imports from Canada and Mexico, two of the United States’ closest allies and largest trading partners.

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“We’ll be announcing the tariffs on Canada and Mexico for a number of reasons. I’ll be putting the tariff of 25 per cent on Canada, and separately, 25 per cent on Mexico, and we’ll really have to do that,” he said.

Trump said that tariffs would commence at 25% and “may or may not rise with time.” However, he suggested that oil imports might be exempt.

Trump also said that he'll impose 10% tariffs on China. Beyond targeting Canada, Mexico, and China, he has threatened 100% tariffs on BRICS nations if they attempt to replace the US dollar as the world’s dominant reserve currency.

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Canada, Mexico engage in last-minute discussions with Rubio to dissuade Trump

In response, officials from Canada and Mexico have been making critical efforts to prevent Trump from implementing these tariffs. According to The New York Times, they have been engaged in last-minute discussions with Secretary of State Marco Rubio, stressing their border enforcement efforts.

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'We are prepared for any scenario': Mexican President Claudia Sheinbaum

On Friday, Mexico’s President Claudia Sheinbaum addressed reporters, saying that the Mexican government had been preparing for months to counter possible tariffs. “We are prepared for any scenario,” she stated, adding that Mexico was “doing everything in our power” to avoid the tariffs.

Tariffs could worsen inflation in US, slower economic growth

Goldman Sachs economists, in a note cited by The New York Times on Friday, said that they expected a gradual implementation of tariffs.

“We still do not see a sustained 25 per cent tariff on both countries as the base case. Instead, we think it is more likely that Trump will announce a tariff with delayed implementation, targeted at certain imports, starting at a lower rate that rises over time, or some combination of these,” they wrote, as cited by The New York Times.

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Goldman Sachs further warned that if Trump imposed tariffs across the board, the consequences would include higher prices in the US and slower economic growth.

Most economists argue that Trump’s tariffs will worsen inflation, slow economic growth, harm US workers, and ultimately place the financial burden on American consumers.

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“Virtually all economists think that the impact of the tariffs will be very bad for America and for the world. They will almost surely be inflationary. It’s inconceivable that other countries won’t retaliate,” said Joseph Stiglitz, a professor of economics at Columbia University and a Nobel laureate, in comments to The Guardian.

(With inputs from agencies)