President Donald Trump has confirmed the implementation of 25% tariffs on goods imported from Canada and Mexico into the United States, stating that negotiations had reached their limit.
Following this announcement, U.S. stock markets reacted negatively, with major indices experiencing significant declines. These tariffs, which Trump had been warning about for months, are set to take effect on Tuesday. Additionally, an extra 10% tariff on Chinese imports is expected to be imposed, subjecting all three of the U.S.’s largest trading partners to increased trade barriers in a short span of time.
“There’s no room left for Mexico or for Canada,” Trump said from the White House on Monday. “The tariffs, you know, they’re all set. They go into effect tomorrow.”
Following his remarks, the Dow Jones Industrial Average closed 1.4% lower, the S&P 500 fell by 1.75%, and the Nasdaq dropped by 2.6%.
Canadian Prime Minister Justin Trudeau responded strongly, stating, “Canada will not let this unjustified decision go unanswered.”
Canadian Foreign Minister Mélanie Joly told the press that Ottawa is planning retaliatory tariffs on U.S. imports valued at C$155 billion ($107 billion; £84 billion), with an immediate first round of C$30 billion targeting essential consumer goods such as pasta, clothing, and perfume.
Joly also emphasized the severity of the situation, calling the tariffs “an existential threat to us,” adding that “thousands of jobs in Canada [are] at stake.”
Meanwhile, China’s commerce ministry condemned the new U.S. tariffs, promising countermeasures. The ministry accused the Trump administration of attempting to “shift the blame” and “bully” Beijing, particularly over the issue of fentanyl distribution.
In a statement, the Chinese ministry urged Washington to “immediately withdraw” the tariffs, calling them “unreasonable and groundless, harmful to others.”
The state-run media outlet The Global Times reported on Monday that China is likely to target U.S. agricultural and food products with a combination of tariff and non-tariff restrictions.
Mexico also declared its intent to retaliate against the new U.S. tariffs, raising concerns about an escalating trade dispute.
Trump justified the tariffs as a measure against what he described as an unacceptable influx of illegal drugs and undocumented immigrants into the U.S. He has previously argued that tariffs, which function as a tax on imported goods, are a necessary tool for economic protection.
These tariffs were initially scheduled to take effect last month, but the U.S. granted Canada and Mexico a one-month reprieve to allow further negotiations. However, the U.S. had already moved ahead with a 10% tariff on Chinese exports in February, effectively raising the total duty on Chinese goods entering the country to at least 20%.
Trump has consistently defended tariffs as a mechanism to correct trade imbalances and bolster U.S. manufacturing.
Despite concerns about the potential economic fallout, particularly in North America, where businesses have long benefited from free trade agreements, Trump dismissed fears of harm to the U.S. economy.
“What they’ll have to do is build their car plants, frankly, and other things, in the United States, in which case they have no tariffs,” he said.
Negotiators from Canada and Mexico had been engaged in discussions in Washington in an attempt to prevent the tariffs from being implemented.
Mexican President Claudia Sheinbaum appeared to address Trump’s actions directly during a public event in Colima earlier on Monday, asserting that “Mexico has to be respected.”
“Co-operation [and] co-ordination, yes, subordination, never,” she declared.
Meanwhile, Prime Minister Trudeau, who was in the United Kingdom, met with King Charles on Monday. Ahead of their meeting, he stated that he planned to raise key issues concerning Canadians, particularly “standing up for our sovereignty and our independence as a nation.”
A day prior, Trudeau had spoken at a summit in London, refuting U.S. claims that Canada was a major contributor to America’s fentanyl crisis.
According to U.S. data, only 1% of fentanyl seized within the country is believed to have originated from Canada.
The Canada Border Services Agency (CBSA) also defended its role in controlling fentanyl trafficking, stating that it has been intensifying its efforts to prevent the drug’s entry into the U.S.
Further escalating trade tensions, Trump also announced a 25% tariff on all steel and aluminum imports, scheduled to take effect on March 12.
Beyond North America and China, he has additionally threatened to introduce “reciprocal” tariffs against specific countries and impose a 25% duty on goods from the European Union.
