Canada and China Hit Back After Trump’s Tariffs on Imports from North America

US President Donald Trump has signed an executive order imposing 25% tariffs on all goods from Canada and Mexico, sparking retaliatory measures from both countries and raising concerns over global supply chain disruptions.

The move, which takes effect on Tuesday, excludes Canadian energy products, which will instead face a 10% duty. Additionally, Trump has imposed an extra 10% tariff on Chinese imports, citing illegal immigration and drug trafficking as a national security threat.

In response, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on CAD 155 billion worth of US imports, with CAD 30 billion taking effect immediately and the rest within 21 days. Meanwhile, China vowed to introduce “corresponding countermeasures” against the US, escalating tensions between the two economic giants.

Mexico’s Response and Rejection of US Allegations

Mexican President Claudia Sheinbaum also reacted strongly, instructing her economy minister to implement a trade retaliation plan. Mexico’s “Plan B” includes tariff and non-tariff measures to protect national interests.

Sheinbaum also pushed back against accusations from Washington that the Mexican government has an “intolerable alliance” with drug trafficking groups. She rejected the claims as “slander” and stated that Mexico would defend its sovereignty against unjustified US pressure.

Trump’s Justification for Tariffs

The White House defended the sweeping tariffs, stating that they were necessary to address the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl”.

Trump invoked the International Emergency Economic Powers Act (IEEPA) to justify the decision, arguing that Canada, Mexico, and China must be held accountable for their commitments to combat illegal immigration and drug trafficking.

Additionally, Trump has pledged to extend tariffs to the European Union in the near future and announced plans to impose duties on semiconductors, steel, aluminum, oil, and gas.

"Tariffs are a powerful, proven source of leverage for protecting the national interest," the White House said in a statement.

Impact on North American Trade and Consumers

The United States, Canada, and Mexico share a highly integrated trade system, with US imports from the two countries exceeding $900 billion in 2023. The new tariffs are expected to significantly disrupt supply chains and increase costs for American consumers.

• Canada exports nearly 80% of its goods to the US, valued at approximately $410 billion.
• Mexico exports 84% of its goods to the US, totaling over $510 billion.
• The new tariffs could raise prices of essential goods, including agricultural products like avocados and tomatoes—key imports from Mexico.
• With over 80% of avocados in the US originating from Mexico, experts warn that import costs will rise, affecting food prices nationwide.

Global Economic Ramifications

The latest round of tariffs could lead to a new trade war, with retaliatory measures from Canada, Mexico, and China affecting key industries, consumer goods, and global markets. The ongoing dispute is expected to fuel inflation, increase business costs, and create instability for international investors.

As Trump moves forward with his aggressive "America First" trade policies, world leaders are bracing for economic retaliation and heightened tensions in global trade relations.