President Donald Trump escalated trade tensions Tuesday by imposing new tariffs on Mexico, Canada, and China, triggering swift retaliation from the U.S.’s largest trading partners. The move sent global financial markets into turmoil, raising concerns about inflation and economic instability.
Shortly after midnight, Trump enforced a 25% tariff on Mexican and Canadian imports, while limiting the levy on Canadian energy products to 10%. The administration also doubled tariffs on Chinese imports, increasing them to 20%.
In response, Beijing announced tariffs of up to 15% on a range of American agricultural exports. The Chinese government also expanded restrictions on U.S. businesses, adding approximately two dozen companies to its controlled export list.
Canadian Prime Minister Justin Trudeau condemned the tariffs, vowing to impose more than $100 billion in countermeasures against American goods within 21 days. “The United States has launched a trade war against its closest ally,” Trudeau said, criticizing the Trump administration’s policies while contrasting the U.S. stance on Russia.
Mexico also announced retaliatory tariffs. President Claudia Sheinbaum stated that Mexico will reveal targeted products on Sunday, signaling a potential effort to negotiate a resolution before further escalation.
Addressing Congress on Tuesday night, Trump defended his decision, citing trade deficits with Mexico and Canada. He also linked the tariffs to drug policy, claiming that both nations had failed to curb fentanyl trafficking into the U.S.
The president acknowledged potential economic disruption, including sharp declines in the stock market and inflation concerns, but framed the tariffs as part of a long-term economic strategy. “It may be an adjustment period, but this will ultimately benefit American farmers and businesses,” Trump said.
Commerce Secretary Howard Lutnick indicated that the U.S. might seek a compromise with Canada and Mexico, hinting at possible negotiations by Wednesday. While affirming that tariffs would not be lifted immediately, Lutnick suggested that the administration could modify its stance based on reciprocal concessions.
Meanwhile, tensions continued to mount between American and Canadian officials. A senior Canadian government representative revealed that Lutnick urged Ontario Premier Doug Ford to de-escalate rhetoric against the U.S. However, Ford reportedly vowed to push back even harder.
Trudeau is expected to speak with Trump in the coming days, though it remains unclear whether discussions will lead to a resolution or further deepen trade hostilities.
