In a significant escalation of trade tensions, Canada and Mexico have declared retaliatory tariffs in response to the United States’s recent imposition of duties on their exports. On Saturday, US President Donald Trump announced a 25% tariff on imports from Canada and Mexico, citing concerns related to illegal immigration and drug trafficking. In response, Canadian Prime Minister Justin Trudeau has stated that Canada would impose 25% tariffs on C$155 billion worth of US goods, as reported by Reuters.
Similarly, Mexican President Claudia Sheinbaum also announced that she has ordered her economy minister to introduce new tariff and non-tariff policies against sweeping duties imposed by the United States on Mexican exports.
In an elaborated statement on X, Sheinbaum stated that her administration does not aim to get involved in conflict with its northern neighbour. Instead, she asserted her commitment to promoting diplomatic discussions and cooperation. The Mexican leader, who has constantly looked to ease the tension with US President Trump, highlighted the significance of constructive engagement rather than intensifying the dispute.
Canada’s tariff details
Canada’s tariff will impact C$155 billion worth of US exports. The first phase of tariffs will affect C$30 billion in goods and will be imposed from Tuesday, similar to the date of implementation of Trump’s tariffs. The rest of C$125 billion in duties will be enacted within 21 days. Trudeau’s reaction came just after Trump announced a 25% tariff on Mexican and Canadian exports and 10% on China goods. This move has ignited fears of a full-scale trade war.
Admitting the possible economic constraint, Trudeau warned that the coming weeks would be difficult for Canadians. However, he also cautioned Americans that Trump’s tariff can have adverse effects as there will be a surge in the costs of everyday basic needs like fuel, food, and other important goods. ‘’They will hike the price for you, including food at the grocery store, gas at the pump,’’ he stated, as reported by Reuters. He also pointed out this trade curtailment would disturb the supply chains and raise prices on both sides of the border.
Mexico tariff details
The Mexican government has also announced their plan to bring in new tariffs against the US. Sheinbaum’s administration has taken major steps to fight organized crime. The Mexican government has seized around 20 million doses of synthetic opioid fentanyl and has held more than 10,000 individuals who are involved in drug trafficking. Since all these efforts, Trump defended the tariff hike by blaming Mexico for its failure to restrict fentanyl smuggling to the US. He also blamed them for allowing uncontrolled migration.
(With inputs from Reuters)