President Donald Trump's sweeping new tariffs on imports from Mexico, Canada, and China took effect early Tuesday, escalating trade tensions as all three nations announced retaliatory measures. The tariffs, which include a 25% levy on most Mexican and Canadian imports and an increase from 10% to 20% on Chinese goods, have rattled global markets and drawn sharp rebukes from affected countries.
"There is no reason, rationale or justification to support this decision that will affect our people and nations ... Nobody wins with this decision," Mexican President Claudia Sheinbaum said at her morning press conference. Sheinbaum confirmed that Mexico would impose retaliatory tariffs but withheld specifics, stating that details would be announced at an event in Mexico City's Zócalo square on Sunday.
Canadian Prime Minister Justin Trudeau responded with immediate countermeasures, declaring a 25% tariff on more than $20 billion in U.S. imports, with additional tariffs on $86 billion worth of American goods to follow within 21 days. "Our tariffs will remain in place until the U.S. trade action is withdrawn," Trudeau said, adding that Canada was considering non-tariff measures if the U.S. did not reverse course.
China also reacted swiftly, with Beijing's finance ministry announcing new tariffs ranging from 10% to 15% on U.S. agricultural imports, including chicken, pork, soybeans, and beef. The measures will take effect next week, further straining trade relations between the world's two largest economies.
Trump defended the tariff hike, arguing that it was necessary to push Canada and Mexico to curb fentanyl trafficking and illegal immigration. "I would just say this to people in Canada or Mexico: if they're going to build car plants, the people that are doing them are much better off building here, because we have the market where they sell the most," Trump said at the White House.
Financial markets responded sharply to the developments, with U.S. stocks closing lower on Monday ahead of the tariff deadline. The S&P 500 fell 1.8%, the Nasdaq dropped 2.6%, and the Dow Jones Industrial Average declined 1.5%. Asian markets were also hit, with Japan's Nikkei down more than 2% and Hong Kong's Hang Seng losing 1.5%.
The tariffs took effect after an initial 30-day delay, during which Mexico and Canada sought to demonstrate increased efforts in border security and drug enforcement. Commerce Secretary Howard Lutnick acknowledged last weekend that both countries had made progress, telling Fox News that Mexico and Canada had "done a reasonable job" curbing migration but had fallen short on controlling fentanyl. "He's sort of thinking about right now how exactly he wants to play it with Mexico and Canada, and that is a fluid situation," Lutnick said on Sunday.
Despite speculation that Trump might adjust the tariff rates, he dismissed the possibility of further negotiations. "No room left for Mexico or for Canada," he said during a White House event with Taiwan Semiconductor Manufacturing Co. (TSMC) CEO C.C. Wei on Monday. "The tariffs, they're all set, they take effect tomorrow."
TSMC, which announced a $100 billion investment in U.S. semiconductor plants, has been cited by the Trump administration as an example of how tariffs could drive foreign companies to shift production to the United States. Lutnick noted that the firm had already received a $6 billion CHIPS Act grant for its Arizona expansion but ramped up its U.S. investment to $100 billion following Trump's tariff threat on semiconductor imports.
With tariffs now in place and retaliation mounting from key trading partners, the U.S. faces escalating tensions that could further disrupt global supply chains and economic stability.
