The US President, Donald Trump, on Saturday imposed tariffs on imports from Mexico, Canada and China, over the flow of drugs and undocumented immigrants from those countries to the US.
In response, the three affected countries announced retaliatory countermeasures, risking a trade war that could significantly impact the economies of Mexico, Canada, China and the US, according to CNN.
Trump’s tariffs represent a reversal of the virtually duty-free trade between the North American countries and an escalation of the trade war between the US and China, which intensified over the past two US administrations.
Stiff Tariffs
On Saturday, the US President signed three executive orders at his Mar-a-Lago club to address the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” which constitutes “a national emergency under the International Emergency Economic Powers Act (IEEPA),” according to the White House fact sheet.
The tariffs include implementing an additional 25% on imports from Canada and Mexico, and a 10% additional tariff on imports from China.
According to Trump’s executive orders, energy imports from Canada will have a lower 10% tariff. Canadian energy products, such as oil, electricity and natural gas, are very important to Americans, as many of them depend on these products for fuel and home heating. Increasing tariffs will impact the price of these products.
Trump’s executive orders will close the “de minimis” loophole, through which shipments of $800 or less entered the US tax-free. This loophole benefited many American small businesses and Chinese e-commerce firms, including Shein and Temu.
Canada’s Retaliatory Measures
In response to Trump’s tariffs, Canada’s Prime Minister, Justin Trudeau, announced retaliatory 25% tariffs on US goods, that will be “far-reaching and include everyday items.” Trudeau had promised earlier that Canada would respond forcefully and swiftly if the US imposed tariffs.
Trudeau
On Saturday night, Trudeau held a news conference announcing that “Canada will be responding to the US trade action with 25% trade tariffs against $155 billion worth of American goods.”
The Canadian Prime Minister added: “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.”
According to Trudeau, the tariffs will impact imports, including “American alcohol, produce, clothing, shoes, household appliances, furniture, materials such as lumber, and much more.”
Mexico’s Response
Similarly, Mexico responded with retaliatory countermeasures. The Mexican President, Claudia Sheinbaum, announced retaliatory tariffs on Saturday. “When we negotiate with other nations, when we talk with other nations, [it is] always with our heads held high, never bowing our heads,” she said.
Sheinbaum
Later, she posted on X: “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,” without providing more details.
China’s Action
The Chinese Ministry of Commerce commented on Trump’s tariffs, saying that their imposition “seriously violates” the rules of the World Trade Organization (WTO). The Ministry said: “China will file a complaint with the WTO, and will take corresponding countermeasures to resolutely defend its rights,” without elaborating what the countermeasures will be.
Meanwhile, China’s Foreign Ministry called the tariffs “not constructive” and will only “undermine” both countries’ work to combat drugs. The Ministry added that China “provides support to the US on the issue of fentanyl” but the fentanyl issue is “America’s problem.”
Tariffs Consequences
The new tariffs threaten adverse consequences on American consumers. They could raise costs, disrupt supply chains, and affect many jobs. The US President acknowledged the impact of tariffs on American consumers. He told reporters on Friday: “There could be some temporary, short-term disruption, and people will understand that. But the tariffs are going to make us very rich and very strong — and we’re going to treat other countries very fairly.”
The tariffs could also spark tensions among the US and its neighbors, Canada and Mexico, and escalate the trade war with China. Speaking to reporters on Saturday, a Trump administration official said that the US will respond to any retaliation from Mexico, Canada and China with much higher tariffs.
Mexico, Canada and China are the US’ largest three trading partners. Mexico has become the largest exporter to the US, overtaking China. In 2024, Mexico exported goods worth $467bn to the US, followed by China with $401bn and Canada with $377bn, according to the US Commerce Department figures.
On the other hand, Canada was the US top importer over the last year, with $322bn worth of goods, followed by Mexico and China, which imported $309bn and $131bn worth of goods from the US, respectively.
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