09:23 AM EST, 02/03/2025 (MT Newswires) -- United States President Donald Trump over the weekend declared a national emergency due to the "extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl" and imposed tariffs on countries he blames for it, noted Commerzbank.

Starting Tuesday, the U.S. will impose tariffs of 25% on imports from Canada and Mexico and 10% on imports from China. These tariffs will be in addition to any existing tariffs. A reduced rate of 10% will apply to energy imports from Canada.

Further tariffs on imports of computer chips, medicines, steel, aluminum, copper, oil and natural gas are in the pipeline and could be imposed from mid-February. Tariffs on imports from the European Union "will definitely come," said Trump, without being more specific.

Mexico and Canada, which are linked to the U.S. by a free trade agreement, account for almost 30% of American imports. China supplies a further 13.5%. This means that a large proportion of U.S. imports would be subject to punitive tariffs, wrote the bank in a note to clients.

This makes this round of tariffs "significantly" larger than the measures taken during Trump's first term in office. Hopes that Trump wouldn't implement the threats he made during the election campaign have as such been dashed, stated Commerzbank.

However, the bank didn't share these hopes in any case.

The importer pays the tariff initially, pointed out Commerzbank. It isn't so easy to say who ultimately bears the costs: if the importers can pass on the tariff increases in full to their customers, then the U.S. households foot the bill.

In this case, the tariffs are nothing more than a discriminatory sales tax -- discriminatory because domestic products and importers from countries not affected by the tariff measures aren't burdened -- on domestic consumption.

However, the U.S. government hopes that Mexican, Canadian or Chinese exporters will be forced to lower their prices to continue selling their products, according to the bank. A stronger US dollar, if the tariffs remain in place for a longer period, could also reduce the inflationary effects, but work against the purpose of the tariffs.

After all, a stronger US dollar would make U.S. exports more expensive on the world market. The effect on the trade deficit would be significantly dampened. In any case, such drastic tariffs, which affect large parts of U.S. international trade, are associated with considerable inefficiencies, added Commerzbank.