Canada, Mexico announce retaliatory tariffs on US

The Canadian and Mexican governments have announced a retaliatory levy on the United States after President Donald Trump followed through on his threat to impose tariffs on both countries alongside China.

Canadian Prime Minister Justin Trudeau told journalists on Saturday that Canada would respond to the new US policy by levying 25 per cent on every US import.

He stated that he was imposing tariffs on US goods worth 155 billion Canadian dollars, which equals 106 US dollars. The tariff will take effect on Tuesday, same day the US tariff is expected to become effective.

Mr Trudeau said the coming weeks would be difficult for Canadians, but Americans would suffer from Trump’s actions.

“Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities,” Mr Trudeau said according to the BBC. “They will raise costs for you, including food at the grocery store and gas at the pump.”

Similarly, Mexico’s President, Claudia Sheinbaum, said the country had initially sought dialogue rather than confrontation with the US but has now been forced to respond in kind.

In a post on X, President Sheinbaum said the country plans to impose a 25 per cent tariff on all US goods entering Mexico.

“I’ve instructed my economy minister to implement the plan B we’ve been working on, which includes tariff and non-tariff measures in defence of Mexico’s interests,” President Sheinbaum wrote.

PREMIUM TIMES reports that the US is a major trading partner and a long-time ally of Canada and Mexico. In 2023, Mexico overtook China as the top destination for US exports.

However, both Canada and Mexico are hitting back at the US despite Mr Trump’s threat to expand the tariff if any country retaliates.

This move raised the prospects of a trade war and consumer price increases.

Trump’s executive order

According to President Trump, the new tariff imposed on its long-time partners was necessitated by the growing health crisis in the US caused by the uncontrolled import of illegal drugs into the country.

He had signed new executive orders imposing a 25 per cent tariff on goods from Mexico and Canada and 10 per cent on goods from China.

Meanwhile, energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10 per cent rate.

President Trump accused the Canadian government of failing to stop the flow of illicit drugs from Canada. However, he noted that more illegal drugs come from Mexico, which is on the southern border, than from Canada in the north.

He stated that the tariffs are designed to stop the flow of fentanyl and undocumented immigrants, noting that the moves were necessary to “protect Americans.”

He promised to keep the duties in place until the “national emergency” in the US over the fentanyl and undocumented migration ends.

However, Mr Trudeau, the Canadian prime minister, rejected Mr Trump’s accusation on migrants and fentanyl.

Mr Trudeau said Mr Trump’s claims are untrue as both countries operate one of the strongest and most secure borders in the world.

According to him, less than one per cent of fentanyl going into the US comes from Canada, and less than one per cent of illegal migrants going into the US come from Canada.

“That doesn’t mean that there isn’t more to do and that’s why we’ve invested 1.3 billion canadian dollar in strengthening our borders and we’re seeing the numbers significantly decreasing at the border already in the past couple of months,” he said

China’s reaction

Meanwhile, China, although yet to impose a retaliatory tariff on US, has rejected the new policy and indicated that it plans to take counter measures.

The country’s Ministry of Commerce, according to Aljazeera, said the Asian country is set to file a lawsuit at the World Trade Organisation (WTO) as the imposition of tariffs by the US violates WTO rules.

It said the duties were “not only unhelpful in solving the US’s own problems, but also undermine normal economic and trade cooperation.”

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“China hopes that the United States will objectively and rationally view and deal with its own issues like fentanyl, rather than threatening other countries with tariffs at every turn,” the ministry added.

“China’s position is firm and consistent. Trade and tariff wars have no winners. Fentanyl is an issue for the US. In the spirit of humanity and goodwill China has given support to the country’s response to the issue.

“We are the first country in the world to do so. China has conducted counternarcotics cooperation with the US side in a broad-based way,” the country noted.