Trade wars erupt as Trump hits Canada, Mexico, China with steep tariffs

U.S. President Donald Trump’s implementation of a 25% tariff on imports from Mexico and Canada commenced on Tuesday, coinciding with a doubling of tariffs on Chinese goods to 20%. This development marks the onset of new trade disputes with the three primary trading partners of the United States.

The tariff measures, which have the potential to disrupt approximately $2.2 trillion in annual bilateral trade, became effective at 12:01 a.m. EST (0501 GMT), shortly after Trump asserted that these nations had not taken sufficient action to curb the influx of the lethal fentanyl opioid and its precursor chemicals into the United States.

In response, China promptly announced additional tariffs ranging from 10% to 15% on select U.S. imports, effective March 10, along with new export restrictions targeting specific U.S. entities.

Canada and Mexico, which have maintained a nearly tariff-free trade relationship with the U.S. for the past thirty years, were prepared to retaliate against their long-standing ally. Canadian Prime Minister Justin Trudeau indicated that Ottawa would impose immediate 25% tariffs on C$30 billion (approximately $20.7 billion) worth of U.S. imports, with an additional C$125 billion (around $86.2 billion) in tariffs if Trump’s measures remained in effect after 21 days. Trudeau previously mentioned that Canada would focus on American beer, wine, bourbon, home appliances, and Florida orange juice.

Ontario Premier Doug Ford expressed to NBC his readiness to halt shipments of nickel and electricity transmission from his province to the U.S. as a form of retaliation. Meanwhile, Mexican President Claudia Sheinbaum was anticipated to reveal her country’s response during a morning press conference in Mexico City, as stated by the economy ministry.

The new 10% tariff on Chinese goods adds to a previously imposed 10% tariff by Trump on February 4, aimed at addressing the U.S. fentanyl overdose crisis. This cumulative 20% duty is in addition to tariffs of up to 25% that Trump had enacted during his first term on approximately $370 billion worth of U.S. imports.

Several products experienced a significant increase in U.S. tariffs under the administration of former President Joe Biden last year. Notably, duties on Chinese semiconductors were raised to 50%, effectively doubling them, while tariffs on Chinese electric vehicles surged to over 100%, marking a fourfold increase.

A new 20% tariff will be imposed on various major consumer electronics imports from China that had previously been exempt from tariffs. This includes items such as smartphones, laptops, video game consoles, smartwatches, speakers, and Bluetooth devices.