On Saturday, U.S. President Donald Trump ordered sweeping tariffs on goods from Mexico, Canada, and China, demanding that these countries curb the flow of fentanyl and illegal immigration, especially in the cases of Canada and Mexico. This move has triggered a trade war that could impact global growth and reignite inflation.
Mexico and Canada, the top two U.S. trading partners, immediately vowed retaliatory tariffs, while China said it would challenge Trump’s decision at the World Trade Organization and take other “countermeasures.”
Trump imposed 25% tariffs on Mexican and most Canadian imports and 10% on Chinese goods through three executive orders, effective starting Tuesday.
He pledged that the tariffs would remain until the national emergency over fentanyl and illegal immigration to the U.S. was resolved, but the White House did not provide any other specifics regarding the criteria for satisfying Trump’s demands.
Canadian Prime Minister Justin Trudeau said Canada would impose 25% tariffs on $155 billion worth of U.S. goods, including beer, wine, lumber, and appliances, with a first round of $30 billion starting Tuesday and a second round of $125 billion 21 days later.
Mexican President Claudia Sheinbaum instructed her economy minister to implement retaliatory tariffs but did not provide details.
China’s Ministry of Commerce did not specify its countermeasures but expressed hopes for the U.S. to address fentanyl and other issues “objectively and rationally.”
Trump’s tariff plan could lead to disruptions in global markets, and it is predicted that U.S. growth may slow by 1.5 percentage points this year, with Canada and Mexico facing recessions. Financial market volatility was evident, as the Mexican peso and Canadian dollar both fell following Trump’s announcement.
