WASHINGTON (AP) — President Donald Trump’s long-threatened tariffs against Canada and Mexico went into effect Tuesday, putting global markets on edge and setting up retaliations by the United States’ North American allies.
Starting just past midnight, imports from Canada and Mexico are now to be taxed at 25%, with Canadian energy products subject to 10% import duties.
The 10% tariff that Trump placed on Chinese imports in February was doubled to 20%, and Beijing retaliated Tuesday with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
Canadian Prime Minister Justin Trudeau said his country would slap tariffs on more than $100 billion of American goods over the course of 21 days. Mexico didn’t immediately detail any retaliatory measures.
Following Canada and China, Mexico President Claudia Sheinbaum said Tuesday that Mexico will respond to 25% tariffs imposed by the United States with its own retaliatory tariffs on U.S. goods.
Sheinbaum said she will announce the products Mexico will target on Sunday in a public event in Mexico City’s central plaza, perhaps with the delay indicating Mexico still hopes to de-escalate the trade war set off by Trump.
U.S. markets dropped sharply Monday after Trump said there was “no room left” for negotiations that could lower the tariffs. Shares in Europe and Asia were mostly lower Tuesday after they took effect.
The Canada and Mexico tariffs were supposed to begin in February, but Trump agreed to a 30-day suspension to negotiate further with the two largest U.S. trading partners. The stated reason for the tariffs is to address drug trafficking and illegal immigration, and both countries say they’ve made progress on those issues. But Trump has also said the tariffs will only come down if the U.S. trade imbalance closes, a process unlikely to be settled on a political timeline.
The tariffs may be short-lived if the U.S. economy suffers. But Trump could also impose more tariffs on the European Union, India, computer chips, autos and pharmaceutical drugs.
Democratic lawmakers were quick to criticize the tariffs, and even some Republican senators raised alarms.
Sen. Susan Collins, R-Maine, said she’s “very concerned” about the tariffs going into effect because of her state’s proximity to Canada.
“Maine and Canada’s economy are integrated,” Collins said, explaining that much of the state’s lobsters and blueberries are processed in Canada and then sent back to the U.S.
The world economy is now caught in the fog of what appears to be a trade war.
Even after Trump announced Monday that the tariffs were going forward, Canadian officials were still in touch with their U.S. counterparts.
“The dialogue will continue, but we are ready to respond,” Canadian Defense Minister Bill Blair said in Ottawa as he went into a special Cabinet meeting on U.S.-Canada relations. “There are still discussions taking place.”
The White House would like to see a drop in seizures of fentanyl inside the United States, not just on the northern and southern borders. Administration officials say that seizures of fentanyl last month everywhere from Louisiana to New Jersey had ties to foreign cartels.
The Trump administration has suggested inflation will not be as bad as economists claim, saying tariffs can motivate foreign companies to open factories in the United States. On Monday, Trump announced that Taiwan Semiconductor Manufacturing Company, the computer chipmaker, would be investing $100 billion in domestic production.
Still, it can take time to relocate factories spread across the world and train workers with the skills they need.
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