Canada and Mexico Retaliate with Counter-Tariffs as Trump’s Trade War Threatens North American Economy
A fresh trade war has erupted among the United States, Canada, and Mexico after President Donald Trump imposed steep tariffs on all imports from America’s top trading partners. China also vowed to challenge the move at the World Trade Organization (WTO).
The Republican president, just two weeks into his second term, signed an executive order Saturday, imposing a 25% tariff on Mexican and Canadian imports and 10% on Chinese goods. Energy imports from Canada, including oil, natural gas, and electricity, will also face a 10% duty.
Trump defended the move as essential to protect Americans from the threats of illicit fentanyl and illegal immigration.
“These tariffs are necessary to safeguard our nation,”
he posted on social media.
Retaliation from Canada and Mexico
The tariffs triggered swift backlash. Canadian Prime Minister Justin Trudeau condemned the decision, calling it a betrayal of the US-Canada alliance.
“The actions taken today by the White House split us apart instead of bringing us together,”
Trudeau said, announcing a matching 25% tariff on $155 billion worth of US goods, including alcohol and fruit.
Trudeau reminded Americans of Canada’s long history of standing by its southern neighbor, from military alliances to disaster relief efforts.
Mexico also hit back, with President Claudia Sheinbaum rejecting Trump’s claims that her government collaborates with criminal organizations. She ordered retaliatory tariffs and warned that the US should focus on combating drug sales and money laundering within its borders.
“We categorically reject the White House’s slander,”
Sheinbaum posted on X.
“If the US wants to address fentanyl consumption, they should start by cracking down on drug sales in their own cities.”
Meanwhile, British Columbia Premier David Eby announced that US liquor brands would be removed from government store shelves, urging Canadians to boycott American alcohol.
Economic Fallout Ahead
With the tariffs set to take effect Tuesday, analysts warn of rising inflation and economic instability. A Yale Budget Lab study predicts US households will lose $1,170 in income annually, while higher import costs could drive up grocery, vehicle, and housing prices.
Democrats took the opportunity to blame Trump for future price hikes. Senate Majority Leader Chuck Schumer took to X, saying:
- “You’re worried about grocery prices? Don’s raising prices with his tariffs.”
- “You’re worried about car prices? Wait till Trump’s Canada tariffs kick in.”
No Exceptions, More Tariffs Incoming
A senior US official confirmed that Trump’s order does not allow exemptions, raising concerns for industries reliant on Canadian wood, vehicle parts, and agricultural imports.
Adding to the uncertainty, Trump hinted at further tariffs on computer chips, steel, oil, copper, and pharmaceutical drugs, signaling a wider economic conflict with the European Union and other trading partners.
Trudeau acknowledged the looming financial pain but urged Canadians to support local businesses.
“We didn’t ask for this, but we won’t back down. Choose Canadian products over American ones,” he said.
As the tariff war escalates, North America faces a turbulent economic road ahead. Will these tariffs strengthen the US economy, or will they backfire? SHARE YOUR THOUGHTS.
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