Beginning of Trump’s Tariff War on Countries

US President Donald Trump’s 25% tariffs on Mexican and Canadian goods took effect on Tuesday.

The move is intended to challenge America’s major trading partners but threatens to weaken the North American economy, including the US economy at a time of significant pressure.

Trump also doubled tariffs on Chinese goods from 10% to 20%, on top of the tariffs already imposed on hundreds of billions of dollars in Chinese goods.

While Trump has given Canada and Mexico ample time to curb dangerous cartels and drug trafficking into the US, they have failed to address the situation, according to a White House statement released shortly before the tariffs were imposed.

The tariffs come at a time when inflation remains a problem, as recent data suggests that Americans and the U.S. economy as a whole are in a more precarious position.

The tariffs threaten to raise the prices Americans pay for a wide range of goods imported from the three countries, according to data from the U.S. Commerce Department.

The only goods that will not face a 25 percent tariff from Canada are energy-related data-x-items such as crude oil, one of the top U.S. imports from the country; they will instead face a 10 percent tariff.

Beijing retaliated on Tuesday by announcing 15 percent tariffs on poultry, wheat, corn and cotton, according to a statement from China’s State Council Tariff Commission.

In addition, 10 percent tariffs were imposed on sorghum, soybeans, meat, aquatic products, fruits, vegetables and dairy products.

Separately, China's Ministry of Commerce announced that it had added 15 U.S. companies, including drone maker Skydive, to its export control list, which bars Chinese companies from exporting dual-use equipment to them.

"We will not accept pressure or threats, and we will resolutely safeguard our national sovereignty, security and development interests," Lu Qingjian, a spokesman for China's parliament, told reporters ahead of the opening of the country's National People's Congress.

Meanwhile, Canadian Prime Minister Justin Trudeau said hours before the tariffs were imposed that Ottawa would retaliate by imposing tariffs on $30 billion in U.S. goods.

Trudeau said that Canada would impose an additional $125 billion in tariffs on U.S. goods by the end of March.

The impact of Trump’s tariffs on Mexico

The 25% tariff on Mexican imports would jeopardize more than $839 billion in annual trade between the two countries and push the Mexican economy to the brink of recession.

Mexico has overtaken China as the United States’ top importer in the past two years. As Latin America’s second-largest economy, Mexico is enjoying a booming trade under the United States-Mexico-Canada Agreement (TMEC). In 2024 alone, U.S. imports from its southern neighbor are expected to reach an all-time high of $505.851 billion, up from $475.216 billion in 2023. While U.S. exports to Mexico also increased, the U.S. trade deficit with Mexico hit a record $171.189 billion.

According to El Pais, most analysts agree that a permanent 25% tariff would push Mexico's already sluggish economy to the brink of recession, given that the United States is the main buyer of Mexican imports.