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, according to the BBC, which quoted economists as warning that 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.
BREAKING:
The trade war has begun.
🇺🇲🇨🇦🇨🇳🇲🇽
President Trump has officially signed orders implementing 25% tariffs on Canada and Mexico and 10% tariffs on China. pic.twitter.com/3MXtZeYmxM
— Megatron (@Megatron_ron) February 1, 2025
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.”
Together, China, Mexico and Canada accounted for more than 40% of imports into the US last year.
Canada, Mexico and the US have deeply integrated economies, with an estimated $2bn (£1.6bn) worth of manufactured goods crossing the borders daily.
In its announcement, the White House accused Mexico’s government of having “an intolerable alliance” with Mexican drug trafficking organizations.
Mexico Reacts
In her response, Mexican President Claudia Sheinbaum called allegations that the Mexican government had alliances with criminal organizations “slander”.
Sheinbaum called on the US to do more to clamp down on the illegal flow of guns south to arm the cartels.
BREAKING in Mexico 🇲🇽 President Claudia Sheinbaum has responded FORCEFULLY to Donald Trump @POTUS escalating threats — pointing to a “Plan B” for Mexico’s retaliation.
I have translated her full response below:
“We categorically reject the White House’s slander against the… pic.twitter.com/c0WaxUy6hr
— David Adler (@davidrkadler) February 2, 2025
Her country is willing to work with the US, she said. “Problems are not resolved by imposing tariffs, but by talking.”
She has instructed her economy minister to respond with tariff and non-tariff measures. They are expected to include retaliatory tariffs of 25% on US goods.
Canadian Response
For his part, Canadian Prime Minister Justin Trudeau said his country will also respond.
“We don’t want to be here, we didn’t ask for this,” he said at a news conference late on Saturday.
“But we will not back down in standing up for Canadians.”
His government will impose 25% tariffs on $155bn worth of American goods – $30bn will come into force on Tuesday and another $125bn in 21 days.
The Canadian prime minister pushed back on the suggestion the shared border posed a security concern, saying less than 1% of fentanyl going into the United States comes from Canada.
“Tariffs are not the best way we can work together to save lives,” Trudeau said.
He also said he had not spoken to Trump since the inauguration, but would keep lines open with US counterparts.
Canada is America’s largest foreign supplier of crude oil. According to the most recent official trade figures, 61% of oil imported into the US between January and November last year came from Canada.
China to File Lawsauit
On the other hand, China said in a statement that it was strongly dissatisfied with the levies and “firmly opposes” them. The 10% tax will be added over and above tariffs already imposed on China by Trump in his first term and by President Joe Biden.
It added that it would file a lawsuit with the World Trade Organization against the US for its “wrongful practice”. “Trade and tariff wars have no winners,” said a spokesperson at China’s Washington embassy.
China’s Vice-Premier Ding Xuexiang told the World Economic Forum in Davos, Switzerland, last month that his country was looking for a “win-win” solution to trade tensions and wanted to expand its imports.
Source: Agencieis
