In a sharp escalation of trade tensions, Canada and Mexico have retaliated with their own tariffs after the United States imposed steep 25% import duties.
US President Donald Trump on Saturday signed economic orders imposing significant new tariffs on Canada, Mexico, and China.
The affected nations are the biggest trading partners of the United States.
Trump said a levy of 25% on Canadian and Mexican imports as well as an additional 10% tax on Chinese goods would come into force on Tuesday. Canadian energy faces a lower 10% tariff.
The US president said the move was in response to his concerns about illegal immigration and drug trafficking – two of the main promises on which he was elected.
Trump said a levy of 25% on Canadian and Mexican imports as well as an additional 10% tax on Chinese goods would come into force on Tuesday. Canadian energy faces a lower 10% tariff.
The US president said the move was in response to his concerns about illegal immigration and drug trafficking – two of the main promises on which he was elected.
“There could be some temporary, short-term disruption, and people will understand that,” Trump had said on Friday before the announcement.
The new policy represents a reversal of virtually duty-free trade among the three North American nations, which has existed for several years, and an expansion of a frosty trade war between China and the US.
CANADA, MEXICO, CHINA HIT BACK
In response to the development, Mexican President Claudia Sheinbaum said her country would impose retaliatory tariffs.
“When we negotiate with other nations, when we talk with other nations, [it is] always with our heads held high, never bowing our heads,” Sheinbaum said.
In an X post, the Mexican president said: “I instruct the Secretary of Economy to implement plan B that we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests.”
It is however not yet clear what Mexico’s retaliatory tariffs entail.
Canadian Prime Minister Justin Trudeau also announced “far-reaching” retaliatory levies.
“Tonight, I am announcing Canada will be responding to the US trade action with 25 percent trade tariffs against $155 billion worth of American goods,” the Canadian leader said after the US tariffs were imposed.
“This will include immediate tariffs on $30 billion worth of goods as of Tuesday, followed by further tariffs on $125 billion of American products in 21 days’ time, to allow Canadian companies and supply chains to seek to find alternatives.”
Trudeau said affected items include American alcohol, produce, clothing, shoes, household appliances, furniture, materials such as lumber, and “much more”.
China’s commerce ministry said it will file a complaint with the World Trade Organization (WTO) and “take corresponding countermeasures”.
The ministry said tariffs are “not constructive” and will only “undermine” work done by both nations to combat narcotics.
Chinese Vice-President Han Zheng had attended Trump’s inauguration — a rare step — as a goodwill gesture to avert friction with the US.
During the World Economic Forum (WEF) in Switzerland last month, Ngozi Okonjo-Iweala, WTO director-general, said a tariff war would be catastrophic.
“If we have tit-for-tat retaliation, whether it’s 25% tariff (or) 60% and we go to where we were in the 1930s we’re going to see double-digit global GDP losses,” she said, warning that “everyone will pay”.
