The United States has officially imposed sweeping tariffs on imports from Canada, Mexico, and China, triggering immediate retaliation from Beijing and Ottawa. The move, which took effect on Tuesday, marks one of the most significant escalations in global trade tensions in decades.
The tariffs, championed by US President Donald Trump, are set to disrupt key supply chains, drive up costs for consumers, and complicate trade relations with America’s largest economic partners.
The new tariffs impose a 25% levy on imports from Canada and Mexico, affecting an estimated $918 billion worth of goods. Trump had initially delayed the tariffs in February but proceeded after citing a lack of progress in tackling illegal immigration and drug trafficking, particularly the flow of fentanyl.
The impact is expected to be significant, especially in the agricultural and construction sectors. Mexico supplied 63% of US vegetable imports and nearly half of US fruit and nut imports in 2023. With over 80% of US avocados coming from Mexico, higher import costs could mean more expensive groceries for American households.
Also, the US relies on Canada for construction materials, with over 70% of softwood lumber and gypsum imports coming from its northern neighbor. Tariffs could drive up housing prices, warned Carl Harris, chairman of the National Association of Home Builders.
In addition to the North American tariffs, Trump signed an order increasing tariffs on Chinese goods from 10% to 20%. Beijing condemned the move, calling it a unilateral imposition of tariffs, and responded by slapping 10–15% levies on a range of US agricultural imports, including soybeans and chicken.
China’s foreign ministry vowed to fight the trade war to the “bitter end,” with spokesman Lin Jian declaring, “The Chinese people will not be intimidated.” The new tariffs are set to affect tens of billions of dollars in trade.
The trade war rattled global markets, with stock indices in Asia and Europe experiencing declines as investors braced for economic turbulence. Economists warn that tariffs could slow growth, increase consumer prices, and impact employment.
According to the Tax Foundation, the tariffs on Canada, Mexico, and China could each reduce US economic output by 0.1%. This could complicate Trump’s campaign pledge to lower prices for Americans.
Canadian Prime Minister Justin Trudeau announced retaliatory 25% tariffs on US goods, vowing that Canada would not let the decision “go unanswered.” Meanwhile, Mexican President Claudia Sheinbaum revealed contingency plans in response to the tariffs.
In Europe, French Economy Minister Eric Lombard called for a “balanced deal” with Washington after the US confirmed plans for a 25% tariff on EU products.
Experts caution that if Trump proceeds with additional tariffs, the US could see its highest effective tariff rate since 1936 by early 2026. Businesses are expected to face rising costs, which could lead to job losses and economic slowdowns.
“The combined duty tariff rate on Canadian lumber could exceed 50%,” warned Robert Dietz, chief economist at the National Association of Home Builders. While the US plans to expand domestic forestry, prices are likely to rise in the short term.
The tariffs, imposed under emergency economic powers, could also face legal challenges from affected industries and foreign governments, adding another layer of uncertainty to the deepening trade war.
