President Donald Trump’s latest round of tariffs on imports from Mexico, Canada, and China went into effect Tuesday, sparking swift retaliation from Beijing and threats of further countermeasures from Canada.
The new tariffs impose a 25% duty on goods entering the U.S. from Mexico and Canada, while products from China face a 10% increase on existing tariffs, according to the White House. The administration described the move as part of Trump’s broader strategy to protect American interests in global trade.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement.
The U.S. tariffs are now at their highest level since 1943, Yale’s Budget Lab reported. The immediate economic impact rippled across global markets, with Wall Street suffering sharp losses on Monday ahead of the tariffs’ implementation. The S&P 500 closed down 1.76%, the Dow Jones Industrial Average fell 1.48%, and the Nasdaq dropped 2.64%.
China swiftly retaliated by announcing additional tariffs of 10% to 15% on U.S. agricultural products such as chicken, wheat, soybeans, and beef. Those duties will take effect on March 10, adding to existing tariffs from the 2018 trade war, though some previous levies had been eased under the 2020 “phase one” trade deal.
Canada also vowed to impose tariffs on American goods in response. Prime Minister Justin Trudeau said in a statement Monday that Canada would impose “tariffs on $30 billion worth of goods immediately and tariffs on the remaining $125 billion on American products in 21 days’ time.” The Canadian government is considering additional non-tariff measures if the U.S. trade action is not reversed, Trudeau added.
The tariffs arrive a month after Trump granted temporary relief to Mexico and Canada following agreements on border security and drug trafficking cooperation. However, the reprieve proved short-lived as the administration pressed forward with its broader protectionist trade agenda.
Stock markets around the world reacted to the escalating trade tensions. Asian markets showed mixed results, with Japan’s Nikkei falling 1.2%, while the Shanghai Stock Exchange edged higher. European markets largely traded lower, with Germany’s DAX down 1.6% and the FTSE 100 in London slipping 0.3%.
As the trade dispute unfolds, economists warn the standoff could weigh heavily on global economic growth if the retaliatory measures continue to escalate.
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