China and Canada Hit Back at Trump’s Tariffs—Mexico Prepares Retaliation

President Donald Trump’s sweeping 25% tariffs on imports from Mexico and Canada took effect on Tuesday, a move aimed at pressuring America’s top trading partners. However, the decision threatens to destabilise the North American economy, including the U.S., at a time when consumers are already struggling with inflation, CNN reported.

Trump also doubled tariffs on all Chinese imports, raising them from 10% to 20%. According to CNN, these new duties add to existing levies on hundreds of billions of dollars’ worth of Chinese goods. In response, China and Canada immediately imposed tariffs on American exports, escalating tensions and fuelling fears of a trade war. Mexico has vowed to announce its own countermeasures by Sunday.

The Trump administration justified the tariffs as a necessary step to curb fentanyl trafficking into the U.S., CNN reported.

“While President Trump gave both Canada and Mexico ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into our country, they have failed to adequately address the situation,” the White House stated just before the tariffs took effect.

Yet, the move comes at a precarious time for the U.S. economy. Inflation remains high, and recent economic data indicates growing instability. The new tariffs are expected to drive up prices on a wide range of imported goods from the three nations, which collectively shipped $1.4 trillion worth of products to the U.S. last year—over 40% of total imports, according to Commerce Department data.

One exception to the 25% Canadian tariff is energy-related goods such as crude oil, which will instead face a 10% tax. Meanwhile, fresh produce, automobiles and car parts, and electronics—including smartphones and computers—will now be subject to tariffs between 20% and 25%.