China, Canada, and Mexico Promise Retaliation Following Trump’s Tariff Announcement

In reaction to Trump’s tariff decision, China, Canada, and Mexico have said that they will levy comparable taxes on US imports.

China, Mexico, and Canada have promised to retaliate over President Donald Trump’s announcement of broad new tariffs on their exports to the US.

Trump announced that a 25% tax on imports from Canada and Mexico and an extra 10% duty on Chinese goods would take effect on Tuesday. The 10% tariff is lower for Canadian energy.

The US president claimed that the action was a reaction to his worries regarding drug trafficking and illegal immigration, two of the primary platforms he used to win the election.

China said that it will take “necessary countermeasures to defend its legitimate rights and interests,” while Canada and Mexico responded that they were planning comparable duties on US exports.

A new age of international trade conflicts may begin with the imposition of tariffs and the ensuing retaliation.

Economists have cautioned that the US’s implementation of import duties and other nations’ reactions may result in price increases for a variety of goods, including food, alcohol, steel, timber, and automobiles.
With US industry organizations already sounding the alarm, consumers worldwide may experience a rise in the cost of living.

However, Trump has stated that if the nations respond, he is prepared to increase the duties much further.

“To hold China, Mexico, and Canada accountable for their promises to stop the flood of poisonous drugs into the United States, today’s tariff announcement is necessary,” the White House said in a statement on X on Saturday.

“This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” Trump said on his Truth Social platform.

A domestic tax that is proportionate to the import’s value and imposed on products as they enter the nation is called a tariff. They play a key role in Trump’s economic strategy.

According to him, they are a means of boosting the US economy, preserving jobs, increasing tax income, and, in this instance, promoting legislative action.

Over 40% of US imports last year came from China, Mexico, and Canada combined.

The economies of the US, Canada, and Mexico are closely intertwined; manufactured items worth an estimated $2 billion (£1.6 billion) cross the borders every day.

The White House said in its announcement that Mexico’s government had “an intolerable alliance” with Mexican drug trafficking groups.

Claudia Sheinbaum, the president of Mexico, responded by calling claims that the Mexican administration had ties to criminal groups “slander.”

Sheinbaum urged the United States to take further action to stop the illegal movement of firearms south to supply the cartels.

She stated that her nation is open to cooperating with the United States. “Talking is a better way to solve problems than imposing tariffs.”

Retaliatory duties of 25% on US goods entering Mexico are anticipated as part of the tariff and non-tariff measures she directed her economics minister to implement in response.

Prime Minister Justin Trudeau of Canada has already proposed retaliatory tariffs on the United States, matching the 25% levied on his nation.

He proposed “far-reaching” duties that would impact 155 billion Canadian dollars ($106.6 billion; £86 billion) worth of American goods, including everything from sporting equipment and home appliances to beer and wine.

Trudeau did not provide further information, but the non-tariff measures under consideration are connected to procurement and essential minerals.

He declared, “We didn’t ask for this, and we don’t want to be here.” “However, we will not compromise in our defense of Canadians.”

The prime minister of Canada denied that the shared border was a security risk, claiming that less than 1% of fentanyl entering the US originates in Canada. Less than 1% of illegal migrants crossed the border into the United States, he claimed.

The greatest foreign supplier of crude oil to the United States is Canada. The latest official trade statistics show that 61% of the oil imported into the United States from January to November of last year originated from Canada.

Although it has not yet declared any retaliatory actions, China stated that it “firmly opposes” the tariffs. The 10% levy on its imports into the US will be on top of the tariffs that President Joe Biden and President Trump previously placed on China during his first term.

A spokesman at China’s embassy in Washington declared, “Trade and tariff wars have no winners.”

Trump has admitted that tariffs may cause “some temporary, short-term disruption.”

The auto industry may be particularly severely impacted. Before a finished vehicle is put together, parts must pass through the US, Canada, and Mexico several times.

The National Homebuilders Association warned that housing costs could rise, and TD Economics predicted that the import duties would raise the average price of a US car by about $3,000.

According to the Canadian Chamber of Commerce, the taxes will “dramatically increase the cost of everything for everyone” and have “immediate and direct consequences on Canadian and American livelihoods.”

“Adding tariffs to the mix would only exacerbate the situation across much of rural America,” according to Farmers for Free Trade, since many US farmers are already having difficulty.

However, the US Retail Industry Leaders Association, which has more than 200 members, including well-known companies like Home Depot, Target, and Walgreens, said it hoped tariffs might still be avoided.

In an explanation of why it was focusing on its top trading partners on Saturday, the White House claimed that Mexican gangs were in charge of trafficking methamphetamine, fentanyl, and other substances.

It stated that Canada would continue to be subject to tariffs until it “coopersates with the US on border security and against drug traffickers.”

Finally, it said that due to its shipments of the deadly synthetic painkiller, “China plays the central role in the fentanyl crisis.”

According to official data, drug seizures have been reported at both the northern and southern US borders, although the levels at the Canadian border are significantly fewer than those with Mexico.

Between October 2023 and last September, US border officials found 43 pounds (19.5 kg) of fentanyl at the northern border, while they found almost 21,000 pounds (9,525.4 kg) in the southern border.

However, new information from Canadian intelligence services indicates that more and more transnational organized crime groups are producing drugs in Canada.

Republican business lobbyist Ashley Davis, who has participated in discussions regarding tariffs and represents major US corporations like Walmart and Boeing, told the BBC’s World Business Report that she believes Trump would reduce tariffs in North America if he could demonstrate progress on the issues he has brought up as grievances, particularly immigration.

“Remember that the two main themes on which Americans voted him in the November elections were the border and China. “I think he’s going to do anything he can to claim wins on that,” she said.