US President Donald Trump on Saturday imposed long-threatened tariffs on imports from Canada, Mexico and China — and it didn’t take long for the countries to respond.
Trump signed an order slapping 25 per cent tariffs on goods from Mexico and Canada, and a 10% duty on Chinese imports, due to start on Tuesday. Energy resources from Canada face a lower, 10 per cent tariff to “minimize any disruptive effects we might have on gasoline and home heating oil prices,” according to a senior administration official.
In the executive order, Trump said that if the countries — the U.S.’s three-largest trading partners — retaliate, it could be met with an “increase or expand in scope” of the duties already imposed.
In a post on X, Trump said the duties had been imposed “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”
The U.S. does about $US1.6 trillion in business each year with Canada, Mexico and China. The tariffs are expected to be used as both bargaining chips and methods to effect foreign policy changes — specifically regarding immigration and drug trade issues — by the Trump administration.
Reaction from one of the three countries was swift and decisive, while the others appeared to take more of a wait-and-see approach to Trump’s tariffs. The European Union is also watching how the newly imposed tariffs will play out, after Trump recently took aim at the EU for what he claims is an unequal trade relationship. Here is a look at their responses.
Canada
Canadian Prime Minister Justin Trudeau slapped retaliatory tariffs of 25 per cent against $US155 billion of US goods soon after the Trump tariffs were announced.
He said duties on $30 billion worth of US goods will be imposed on Tuesday, with tariffs on a further $US125 billion worth of products are due to be introduced in 21 days, “to allow Canadian companies and supply chains to seek to find alternatives.”
“Like the American tariffs, our response will also be far-reaching and include everyday items such as American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes,” Trudeau said in a press conference on Saturday evening.
“It’ll include major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more.”
Addressing American citizens directly, Trudeau added: “This is a choice that, yes, will harm Canadians, but beyond that, it will have real consequences for you, the American people.”
Retaliatory tariffs are expected to further exacerbate price hikes in both the US and elsewhere. The price of everything from cars and electronics to toys and food is expected to be impacted.
Trudeau added that “it doesn’t have to be this way.”
“Yes, we’ve had our differences in the past, but we’ve always found a way to get past them. As I’ve said before, if President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us,” he said.
Meanwhile, Ontario said it will pull all American alcohol products from its government-run liquor shelves beginning Tuesday in response to the tariffs. Outlets of the Liquor Control Board of Ontario will also take US products out of its catalog so other retailers can’t order or restock those items, according to a Sunday statement by Premier Doug Ford.
Mexico
Mexico also vowed retaliation following the news, although did not reveal specifics.
President Claudia Sheinbaum slammed Trump’s tariffs and said she had instructed the secretary of the economy to “implement the Plan B we have been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests.”
In a long post on X, the president added: “We categorically reject the White House’s slander of the Government of Mexico alleging alliances with criminal organizations, as well as any intention to interfere in our territory.”
“Mexico does not want confrontation. We start from the collaboration between neighbouring countries,” she said in the post, translated by NBC. “Mexico not only does not want fentanyl to reach the United States, it does not want it to reach anywhere.”
“We must work together in a comprehensive manner, but always under the principles of shared responsibility, mutual trust, collaboration and above all, respect for sovereignty, which is non-negotiable. Coordination, yes; subordination, no,” she added.
China
China said it would file a lawsuit with the World Trade Organization in response to the duties, and “take necessary countermeasures.”
“The US’s unilateral tariff hike seriously violates WTO rules, does nothing to resolve its own issues, and disrupts normal economic and trade cooperation between China and the U.S.,” the Chinese Ministry of Commerce said in a statement Sunday, according to an NBC translation.
“In response to this wrongful action, China will file a lawsuit with the WTO and take necessary countermeasures to firmly safeguard its rights and interests.” China has complained to the WTO over tariffs before, notably regarding the EU’s tariffs on Chinese EVs last year.
The fact that China stopped short of immediate escalation has raised hopes that there could be some room to avoid an all-out trade war between the two countries. The lower, 10 per cent-tariffs imposed on Chinese-made goods may also be a relief given repeated threats made by Trump on the campaign trail to impose duties of 60 per cent or more on imports from the country.
In its statement, China pushed back on Trump’s comments about fentanyl, describing it as a “domestic issue.”
“China urges the U.S. to take an objective and rational approach to its domestic issues, including fentanyl, rather than resorting to tariff threats against other countries,” it said.
Synthetic opioid fentanyl is an addictive drug that causes many thousands of overdose deaths each year in the U.S. The chemicals needed to make the drug are mostly produced in China and Mexico. Washington and Beijing had previously agreed to cooperate on the issue.
The EU
The European Union said Sunday that it “regrets” the U.S. decision to impose tariffs on Canada, Mexico and China, and would “respond firmly” if Trump imposed tariffs on the EU, according to a European Commission spokesperson.
Trump has made no secret of his opinion that the U.S. and the EU have what he has claimed is an unequal trade relationship.
“From the standpoint of America, the EU treats us very, very unfairly, very badly,” Trump said in a virtual address to the World Economic Forum in Davos, Switzerland, this month.
The EU is not currently aware of any additional tariffs being placed on its products, the spokesperson said.
“Our trade and investment relationship with the U.S. is the biggest in the world. There is a lot at stake,” the spokesperson said. “Across-the-board tariff measures raise business costs, harm workers and consumers. Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides.”
Trump has previously vowed to place tariffs on the EU, with his latest statement on Friday adding that he would “absolutely” do so. Tensions between Trump and the EU were already high after the president made a proposal to buy Greenland.
‘Global trade war’
In a note on Sunday, Paul Ashworth, Capital Economics’ chief North America economist, said Trump’s tariffs on Canada, Mexico and China were “just the first strike in what could become a very destructive global trade war.”
He said he expects European Union imports to be targeted in the next couple of months, with universal tariffs — much heralded by Trump on the campaign trail — expected in April.
The economic impact will be significant for all countries involved, according to Ashworth.
“Since exports to the U.S. account for around 20% of their GDP, today’s tariffs could plunge both the Canadian and Mexican economies into recession later this year,” he wrote.
“The resulting surge in U.S. inflation from these tariffs and other futures measures is going to come even faster and be larger than we initially expected.”
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