AP
Washington
President Donald Trump has signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation and an undeniable sense of betrayal from the country’s North American neighbours as a trade war erupted among the longtime allies.
The Republican President posted on social media that the tariffs were necessary “to protect Americans,” pressing the three nations to do more to curb the manufacture and export of illicit fentanyl and for Canada and Mexico to reduce illegal immigration into the US.
The tariffs, if sustained, could cause inflation to significantly worsen, threatening the trust that many voters placed in Trump to lower the prices of groceries, gasoline, housing, autos and other goods as he promised. They also risked throwing the global economy and Trump’s political mandate into turmoil just two weeks into his
second term.
Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada.
Energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate. Trump’s order includes a mechanism to escalate the rates charged by the US against retaliation by the other countries, raising the specter of an even more severe
economic disruption.
“The actions taken today by the White House split us apart instead of bringing us together,” Canadian Prime Minister Justin Trudeau said in a sombre tone.
He announced that his country would put matching 25% tariffs on up to $155 billion in US imports, including alcohol and fruit.
He channelled the betrayal that many Canadians are feeling, reminding Americans that Canadian troops fought alongside them in Afghanistan and helped respond to myriad crises from wildfires in California to Hurricane Katrina.
“We were always there standing with you, grieving with you, the American people,” he said.
Mexico’s President also ordered retaliatory tariffs. China did not immediately respond to Trump’s action.
“We categorically reject the White House’s slander that the Mexican government has alliances with criminal organisations, as well as any intention of meddling in our territory,” Mexican President Claudia Sheinbaum wrote in a post on X while saying she had instructed her economy secretary to implement a response that includes retaliatory tariffs and other measures in defense of Mexico’s interests.
“If the United States government and its agencies wanted to address the serious fentanyl consumption in their country, they could fight the sale of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”
The Premier of the Canadian province of British Columbia, David Eby, specifically called on residents to stop buying liquor from US “red” states and said it was removing American alcohol brands from government store shelves as a response to the tariffs.
The tariffs will go into effect on Tuesday, setting up a showdown in North America that could potentially sabotage economic growth. A new analysis by the Budget Lab at Yale laid out the possible damage to the US economy, saying the average household would lose the equivalent of $1,170 in income from the taxes. Economic growth would slow and inflation would worsen – and the situation could be even worse with retaliation from other countries.
Democrats were quick to warn that any inflation going forward was the result of Trump’s actions.
