United States President, Donald Trump, on Saturday, signed an executive order imposing significant tariffs on imports from Mexico, Canada, and China, sparking immediate backlash and feelings of betrayal among America’s North American neighbours, as a trade war ensued among long-standing allies.
Trump, in a post on social media, argued that the tariffs were essential “to protect Americans,” urging the three nations to do more to combat the production and export of illicit fentanyl, as well as pushing Canada and Mexico to curb illegal immigration into the United States.
If sustained, these tariffs could lead to a severe increase in inflation, potentially undermining Trump’s promises to reduce the costs of groceries, gasoline, housing, and other goods.
The economic implications could also send shockwaves through the global economy, creating turmoil just two weeks into Trump’s second term.
In an effort to tackle what he deemed an economic emergency, Trump authorized 10% tariffs on all Chinese imports and 25% tariffs on products coming from Mexico and Canada.
Energy products from Canada, such as oil, natural gas, and electricity, were set to be taxed at 10%.
Trump’s order also established a mechanism for escalating tariffs in response to retaliation from the affected countries, raising the possibility of deeper economic disruption.
Canadian Prime Minister Justin Trudeau expressed his disappointment, describing the White House’s actions as divisive rather than unifying.
“The actions taken today by the White House split us apart instead of bringing us together,” Trudeau said, highlighting the shared history of cooperation between the two nations.
He reminded Americans of Canada’s role in supporting them through crises, from joint efforts in Afghanistan to assistance during California wildfires and Hurricane Katrina.
Mexico followed suit, with President Claudia Sheinbaum announcing retaliatory tariffs and denouncing Trump’s allegations that the Mexican government was linked to criminal organizations.
“We categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations,” Sheinbaum stated, further criticizing the U.S. for not addressing its own domestic drug issues.
Trudeau’s administration also encouraged Canadian residents to stop purchasing liquor from U.S. “red” states, with the British Columbia premier urging the removal of American alcohol brands from government-run stores in response to the tariffs.
The tariffs were set to take effect on Tuesday, with experts warning of potential damage to both U.S. and global economies.
Yale’s Budget Lab forecast that the tariffs could cost U.S. households an average of $1,170 in income and slow economic growth, while further escalating inflation. Retaliatory actions from other nations could worsen these effects.
Democrats were quick to point out the inflationary consequences of Trump’s actions, with Senate Democratic leader Chuck Schumer calling attention to the potential price hikes on everyday items like groceries, tomatoes, and cars. “You’re worried about grocery prices. Don’s raising prices with his tariffs,” Schumer warned on social media.
A senior official from the U.S. administration revealed that the lower tariff rates on energy were aimed at preventing a dramatic spike in gasoline or utility prices, signaling awareness of the inflation risks.
However, the official also acknowledged the broader consequences, especially for industries like homebuilding that rely on Canadian lumber.
The new tariffs, notably, had no exceptions or exemptions, potentially affecting industries across the U.S. economy, including automakers, farmers, and other sectors that rely on imports.
A senior adviser at the Center for Strategic and International Studies, William Reinsch, questioned the economic logic behind the tariffs.
“It doesn’t make much economic sense,” Reinsch remarked, noting that historically, raw materials had been taxed at low rates to keep manufacturing costs down and remain competitive.
By imposing these tariffs, Trump reaffirmed his commitment to his economic and national security policies.
However, the announcement also underscored the seriousness with which he was approaching the issue of trade imbalances, signaling that higher import taxes would continue to be a hallmark of his second term.
As the tariffs took effect, Trudeau warned of the economic fallout, but maintained hope for the future of U.S.-Canada relations.
“It is going to have real consequences for people, for workers on both sides of our border,” he said, acknowledging the inevitable pain while reiterating Canada’s resolve in standing up for its interests and the long-standing relationship between the nations.
