Canada, Mexico and China have vowed to respond to sweeping new tariffs to their exports to the US announced by President Donald Trump.
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.
In response, both Canada and Mexico said they were preparing similar tariffs on US goods, while China added it would take “necessary countermeasures to defend its legitimate rights and interests”.
The implementation of tariffs and the subsequent retaliation could mark the start of a new era of global trade wars.
Economists have warned the introduction of the import taxes by the US, and the responses from other countries, could lead to prices rising on a wide range of products, from cars, lumber, and steel to food and alcohol.
Consumers in all countries could see an increase in the cost of living if businesses decide to pass on higher costs to customers, with US industry groups already raising the alarm.
But Trump has indicated he is ready to escalate the duties further if the countries retaliate.
“Today’s tariff announcement is necessary to hold China, Mexico, and Canada accountable for their promises to halt the flood of poisonous drugs into the United States,” the White House said in a statement on X on Saturday.
Trump posted on his Truth Social platform: “This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”
A tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import. They are a central part of Trump’s economic vision.
He sees them as a way of growing the US economy, protecting jobs and raising tax revenue – and in this case, pushing for policy action.
Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year.
