U.S. President Donald Trump has imposed 25% tariffs on most Canadian and Mexican imports and doubled the existing 10% tariff on Chinese imports to 20%, affecting approximately $1.5 trillion in annual trade.
Trump followed through on his threat to hit Canada and Mexico with large-scale import duties, enacting one of the most significant tariff increases in the U.S. since the 1930s. This marks a sharp escalation in the ongoing trade war, potentially straining ties with key economic partners.
The new tariffs—25% on most Canadian and Mexican imports and an increase from 10% to 20% on Chinese goods—represent an expansive move signaling Trump’s intent to use import duties to generate revenue and boost domestic manufacturing jobs.
Trump’s move triggered immediate responses from Canada and China, with Mexico also considering countermeasures. The decision casts uncertainty over the trade agreement Trump negotiated with Canada and Mexico during his first term and could further strain the U.S. economy, potentially fueling inflation.
According to a report from Yale University’s Budget Lab, these tariffs will raise U.S. import duties to their highest average level since 1943, adding up to $2,000 in annual costs per American household. The report also warns of a significant slowdown in U.S. economic growth, especially if other countries respond with similar actions.
On Monday night, the Canadian government announced a large-scale counter-tariff package targeting U.S. goods. The first phase includes 25% tariffs on $30 billion CAD ($20.6 billion USD) worth of American exports, set to take effect simultaneously with the U.S. tariffs. A second round of 25% tariffs on an additional $125 billion CAD in goods—including cars, trucks, steel, and aluminum—will follow in three weeks.
“Canada will not leave this unjustified decision unanswered,” Prime Minister Justin Trudeau stated late Monday, noting that the response mirrors the one he announced in February after Trump signed his sweeping tariff order.
Meanwhile, China has imposed tariffs on U.S. exports and added 10 American firms to its “unreliable entities” list in retaliation. Beijing will impose a 15% duty on American goods such as poultry and cotton, while soybeans will face a 10% tariff.
Trump has expressed interest in speaking with Chinese President Xi Jinping, but a month has passed since he raised the possibility of a call, and no negotiations have taken place yet.
