U.S. President Donald Trump’s new 25% tariffs on imports from Canada and Mexico took effect on Tuesday, marking a significant escalation in trade tensions with two of America’s closest trading partners.
The tariffs, which went live at 12:01 a.m. EST, target nearly $2.2 trillion in annual trade and are intended to pressure both countries to address the flow of fentanyl and its precursor chemicals into the U.S.
China Responds with Additional Tariffs and Export Restriction
China retaliated immediately after the deadline, announcing additional tariffs of 10%-15% on certain U.S. imports, effective March 10. Beijing also imposed export restrictions on 25 U.S. entities, citing national security concerns.
These measures target a wide range of U.S. agricultural products, including meats, grains, cotton, and dairy, as well as firms involved in arms sales to Taiwan.
Canada and Mexico Prepare Retaliatory Measures
Canada and Mexico, which have enjoyed virtually tariff-free trade with the U.S. for three decades, are poised to retaliate.
Canadian Prime Minister Justin Trudeau announced immediate 25% tariffs on C$30 billion ($20.7 billion) worth of U.S. imports, with another C$125 billion ($86.2 billion) in tariffs if the U.S. duties remain in place for 21 days. Targeted products include American beer, wine, bourbon, home appliances, and Florida orange juice.
Ontario Premier Doug Ford also threatened to cut off shipments of nickel and electricity to the U.S. in retaliation. Meanwhile, Mexican President Claudia Sheinbaum is expected to announce her country’s response during a news conference in Mexico City.
Cumulative Tariffs on Chinese Goods Reach 20 Percent
The new 10% tariff on Chinese goods adds to a previous 10% duty imposed on February 4, bringing the total levy to 20%. This comes on top of existing tariffs of up to 25% on $370 billion worth of Chinese imports. The latest tariffs will affect major consumer electronics, including smartphones, laptops, videogame consoles, and smartwatches, which were previously untouched by U.S. duties.
Why It Matters
The tariffs on Canada and Mexico could disrupt the highly integrated North American economy, which relies on cross-border trade for manufacturing, energy, and agriculture. Analysts warn that these measures could lead to higher costs for consumers and businesses, potentially triggering a recession.
Already, U.S. farmers have been hard hit by Trump’s trade policies, losing approximately $27 billion in export sales during his first term. The new tariffs on China could further wipe out their market share, with Brazil and other competitors poised to benefit.
Canada’s Prime Minister Justin Trudeau has already criticized the tariffs, stating that they violate the U.S.-Mexico-Canada Agreement (USMCA) signed during Trump’s first term. In a similar manner, China’s commerce ministry accused the U.S. of undermining World Trade Organization (WTO) rules and the foundation of economic cooperation between the two nations.
