In a bold move, President Donald Trump has initiated a trade war by imposing steep tariffs on imports from Mexico, Canada, and China. The executive order, signed on February 1, 2025, at Mar-a-Lago, imposes a 25% tariff on goods from Mexico and Canada, and a 10% tariff on goods from China. The tariffs are set to take effect on February 4, 2025.
Reaction from Canada and Mexico
The announcement has sparked an immediate backlash from North America’s largest trading partners. Canadian Prime Minister Justin Trudeau announced retaliatory tariffs on $155 billion worth of American goods, including alcohol, fruit, and other consumer products.
Trudeau emphasized the potential consequences for American consumers, warning of higher prices on groceries and other goods.
Mexican President Claudia Sheinbaum also condemned the tariffs, categorically rejecting the White House’s claims of alliances with criminal organizations. Sheinbaum instructed her economic minister to implement retaliatory tariffs and other measures to defend Mexico’s interests.
Volume of Trade Between the USA and Canada
The United States and Canada share one of the largest bilateral commercial relationships in the world. In 2022, the total trade between the two countries amounted to over $960.9 billion. Energy products comprised one-third of the $598 billion worth of exports to the United States. In comparison, motor vehicles and parts accounted for nearly one-fifth of the $362.9 billion in imports from the United States.
Key Products of Canada Tariffed by the USA
The new tariffs will affect a wide range of Canadian products, including energy resources such as oil, natural gas, and electricity, which will be taxed at a 10% rate. Other key products subject to the 25% tariff include motor vehicles, parts, and various consumer goods.
The trade war initiated by President Trump is expected to have significant economic repercussions, potentially worsening inflation and disrupting the global economy. As the situation unfolds, both Canada and Mexico have vowed to defend their interests and protect their economies from the impact of these tariffs.
