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The US officially imposed 25 percent tariffs on Canadian and Mexican goods on Tuesday, Mar. 4. On the same day, the US also raised tariffs on Chinese imports to 20 percent.
On his social media platform Truth Social, Trump claimed the solution to the trade wars is bringing more businesses into the country.
"IF COMPANIES MOVE TO THE UNITED STATES, THERE ARE NO TARIFFS!!!" he posted.
In response, all three nations have announced or signaled plans for counter-tariffs, setting the stage for trade wars that economists fear could lead to higher prices, supply chain disruptions, and job losses in many industries.
Canada Hits Back With $155B In Tariffs
Canadian Prime Minister Justin Trudeau called the US tariffs "unjustified" in a statement on Monday, Mar. 3. He outlined Canada's immediate response, which includes 25 percent tariffs on $155 billion in US goods.
The first wave, affecting $30 billion in US products, takes effect immediately, while the remaining $125 billion will be implemented within 21 days.
"Our tariffs will remain in place until the US trade action is withdrawn, and should US tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures," said Trudeau. "While we urge the US administration to reconsider their tariffs, Canada remains firm in standing up for our economy, our jobs, our workers, and for a fair deal."
Trudeau also emphasized the measures Canada has taken to stop the flow of fentanyl, which Trump has cited as a reason for the trade penalties. Since December 2024, fentanyl seizures at the US border from Canada have dropped 97 percent, Trudeau said.
The prime minister also warned that the trade war would backfire, causing significant economic harm to most US citizens.
"Because of the tariffs imposed by the US, Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs," Trudeau said. "Tariffs will disrupt an incredibly successful trading relationship. They will violate the very trade agreement that was negotiated by President Trump in his last term."
Mexico To Announce Response On Sunday
Mexican President Claudia Sheinbaum joined Canada in calling the US tariffs unwarranted. At a news conference, Sheinbaum said she'll announce retaliatory measures on Sunday, Mar. 9, in Zócalo, Mexico City's main public plaza.
The move may allow the US and Mexico one last chance to de-escalate the trade war.
"There is no motive, reason, or justification to support this decision that will affect our people and nations," said Sheinbaum. "We have said it in different ways: cooperation and coordination, yes. Subordination and interventionism, no.
"Mexico will be respected. We are equal nations."
Sheinbaum also called claims made by the White House "offensive, defamatory and without support," the Associated Press reported. The White House accuses Mexico's government of having "an intolerable relationship" with drug cartels.
The Mexican president said her new administration has already seized more than a ton of fentanyl and busted 329 methamphetamine labs.
"It's inconceivable that they don't think about the damage this is going to cause to United States citizens and businesses with the increase in prices for things produced in our country," said Sheinbaum. "Also the damage it will cause by stopping job creation in both countries. No one wins with this decision."
China Responds With Tariffs, Business Restrictions
China also struck back swiftly, announcing additional tariffs of up to 15 percent on US agricultural imports, including chicken, pork, soy, and beef. The new tariffs take effect on Monday, Mar. 10, with exemptions for goods already in transit until Saturday, Apr. 12.
China's Ministry of Foreign Affairs spokesperson Lin Jian said Trump is using fentanyl as a "flimsy excuse" to raise tariffs on Chinese exports.
"The US, not anyone else, is responsible for the fentanyl crisis inside the US," Jian said at a news conference. "In the spirit of humanity and goodwill towards the American people, we have taken robust steps to assist the US in dealing with the issue. This is obvious to all and people from various sectors in the US have expressed thanks to China on multiple occasions.
"Instead of recognizing our efforts, the US has sought to smear and shift the blame to China and is seeking to pressure and blackmail China with tariff hikes. They've been punishing us for helping them. This is not going to solve the US's problem and will undermine our counternarcotics dialogue and cooperation."
China's Ministry of Commerce also expanded restrictions on US companies doing business in the country.
"If the US has other agenda in mind and if war is what the US wants, be it a tariff war, a trade war, or any other type of war, we're ready to fight till the end," said Jian. "We urge the US to stop being domineering and return to the right track of dialogue and cooperation at an early date."
Economic Fears Grow Domestically
The tariffs have intensified concerns among US businesses and consumers already struggling with rising costs and economic uncertainty. Consumer confidence took its steepest monthly dive since August 2021, with The Conference Board reporting a sharp drop in expectations for job growth and business conditions.
On the morning the tariffs went into effect, the Dow Jones Industrial Average fell more than 803 points as of 11:10 a.m. The drop came one day after the Dow tumbled 649.67 points in the index's sharpest decline since December 2024.
The S&P 500 fell about 1.8 percent and the Nasdaq Composite dropped 1.7 percent on the morning of March 4. The stock declines reflect growing investor fears over prolonged trade disruptions.
Industries reliant on cross-border trade, including auto manufacturing, agriculture, and retail, are expected to take a significant hit. Automobile prices are projected to rise due to higher costs on imported components from Canada and Mexico, while farmers exporting to China now face additional tariffs on key products like soybeans, pork, and dairy.
Retailers are also bracing for higher prices on consumer goods. Best Buy and Target's CEOs hinted that prices for shoppers will likely rise because of Trump's tariffs, CNBC reported.
The trade wars come as Americans continue to struggle with inflation, which has kept pressure on household budgets. Egg prices spiked 15 percent in January and housing costs have risen 4.4 percent since early 2024.
Unemployment claims have surged to their highest level since October 2024. New claims jumped by 22,000 to 242,000 for the week ending Saturday, Feb. 22.
Experts warn that job losses could mount in industries affected by retaliatory tariffs, particularly manufacturing and transportation.
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