Canada, Mexico and China respond to Trump’s tariffs

by

Canadian, Mexican and Chinese flags.

Nurphoto | Nurphoto | Getty Images

U.S. President Donald Trump on Saturday imposed long-threatened tariffs on imports from Canada, Mexico and China — and it didn’t take long for the countries to respond.

Trump signed an order slapping 25% tariffs on goods from Mexico and Canada, and a 10% duty on Chinese imports, due to start on Tuesday. Energy resources from Canada face a lower, 10% tariff to “minimize any disruptive effects we might have on gasoline and home heating oil prices,” according to a senior administration official.

In the executive order, Trump said that if the countries — the U.S.’s three-largest trading partners — retaliate, it could be met with an “increase or expand in scope” of the duties already imposed.

In a post on X, Trump said the duties had been imposed “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”

The U.S. does about $1.6 trillion in business each year with Canada, Mexico and China. The tariffs are expected to be used as both bargaining chips and methods to effect foreign policy changes — specifically regarding immigration and drug trade issues — by the Trump administration.

Reaction from one of the three countries was swift and decisive, while the others appeared to take more of a wait-and-see approach to Trump’s tariffs. Here is a look at their responses.

is expected to be impacted.

Trudeau added that “it doesn’t have to be this way.”

“Yes, we’ve had our differences in the past, but we’ve always found a way to get past them. As I’ve said before, if President Trump wants to usher in a new golden age for the United States, the better path is to partner with Canada, not to punish us,” he said.

long post on X, the president added: “We categorically reject the White House’s slander of the Government of Mexico alleging alliances with criminal organizations, as well as any intention to interfere in our territory.”

Read more CNBC tariffs coverage

“Mexico does not want confrontation. We start from the collaboration between neighboring countries,” she said in the post, translated by NBC. “Mexico not only does not want fentanyl to reach the United States, it does not want it to reach anywhere.”

“We must work together in a comprehensive manner, but always under the principles of shared responsibility, mutual trust, collaboration and above all, respect for sovereignty, which is non-negotiable. Coordination, yes; subordination, no,” she added.

notably regarding the EU’s tariffs on Chinese EVs last year.  

Chinese exporters implement strategies to adjust to Trump's tariffs threats

The fact that China stopped short of immediate escalation has raised hopes that there could be some room to avoid an all-out trade war between the two countries. The lower, 10%-tariffs imposed on Chinese-made goods may also be a relief given repeated threats made by Trump on the campaign trail to impose duties of 60% or more on imports from the country.

In its statement, China pushed back on Trump’s comments about fentanyl, describing it as a “domestic issue.”

“China urges the U.S. to take an objective and rational approach to its domestic issues, including fentanyl, rather than resorting to tariff threats against other countries,” it said.

Synthetic opioid fentanyl is an addictive drug that causes many thousands of overdose deaths each year in the U.S. The chemicals needed to make the drug are mostly produced in China and Mexico. Washington and Beijing had previously agreed to cooperate on the issue.

‘Global trade war

In a note on Sunday, Paul Ashworth, Capital Economics’ chief North America economist, said the tariffs were “just the first strike in what could become a very destructive global trade war.”

He said he expects European Union imports to be targeted in the next couple of months, with universal tariffs — much heralded by Trump on the campaign trail — expected in April.

The economic impact will be significant for all countries involved, according to Ashworth.

“Since exports to the U.S. account for around 20% of their GDP, today’s tariffs could plunge both the Canadian and Mexican economies into recession later this year,” he wrote.

“The resulting surge in U.S. inflation from these tariffs and other futures measures is going to come even faster and be larger than we initially expected.”

— CNBC’s Tanaya Macheel, Kevin Breuninger and Jeff Cox contributed to this report.

Leave a Comment