President Donald Trump’s latest round of tariffs has set off a fresh wave of trade disputes, slapping a 25% duty on imports from Canada and Mexico while doubling levies on Chinese goods to 20%.
The tariffs, which kicked in early Tuesday, could shake up $2.2 trillion in annual U.S. trade. Trump justified the move by accusing all three countries of failing to curb the flow of fentanyl and its precursors into the U.S.
China wasted no time hitting back, rolling out new tariffs of 10-15% on U.S. imports starting March 10 and imposing export restrictions on select American firms. Meanwhile, longtime trade partners Canada and Mexico, accustomed to near tariff-free dealings with the U.S., prepared to retaliate.
Canadian Prime Minister Justin Trudeau announced immediate 25% tariffs on $20.7 billion worth of American goods, with a potential expansion to $86.2 billion if the U.S. doesn’t back down within three weeks. Among the targeted products: bourbon, Florida orange juice, beer, and home appliances. Trudeau warned that Trump’s decision would disrupt decades of successful trade and violate the U.S.-Mexico-Canada Agreement. Ontario Premier Doug Ford even floated the idea of cutting off nickel shipments and electricity exports to the U.S.
Mexico’s response is expected soon, with President Claudia Sheinbaum set to outline her government’s next steps.
The situation with China is even more volatile. The new 20% tariff builds on the 10% duty Trump imposed last month as punishment for China’s alleged role in the U.S. fentanyl crisis. These levies, coupled with existing tariffs from Trump’s first term, now affect over $370 billion in Chinese goods. Beijing countered by targeting American agricultural exports—including meat, grain, cotton, and dairy—while placing 25 U.S. companies under investment restrictions, citing national security concerns.
China’s commerce ministry slammed the tariffs as violations of WTO rules and warned they could undermine trade relations. Meanwhile, U.S. farmers, already battered by Trump’s previous trade wars, stand to lose even more market share to competitors like Brazil.
The North American economy, deeply intertwined across borders, faces potential upheaval. The Canadian Chamber of Commerce called Trump’s decision “reckless,” warning of looming job losses and economic instability. “Tariffs are a tax on the American people,” CEO Candace Laing stated.
Automakers are also sounding the alarm. Matt Blunt, president of the American Automotive Policy Council, urged Trump to exempt vehicles that meet USMCA content rules, warning that tariffs could disrupt supply chains and raise costs for consumers.
Financial markets didn’t take the news well. Stocks tumbled, while investors rushed to safe-haven bonds. The Canadian dollar and Mexican peso both slipped against the U.S. dollar.
Trump, undeterred, has kept up an aggressive tariff agenda since returning to office in January. Next up? A fresh batch of 25% tariffs on steel and aluminum, set to hit March 12. He’s also eyeing steep duties on lumber imports—bad news for Canada, already struggling under a 14.5% tariff on softwood lumber.
With trade tensions reaching new heights, Trump is expected to double down on his “America First” vision during his upcoming address to Congress. Whether this strategy strengthens the U.S. economy or pushes it toward turmoil remains to be seen.
