The United States has officially implemented a new wave of tariffs, escalating trade tensions with its three largest trading partners—Mexico, Canada, and China. The tariffs, which took effect at 12:01 a.m. EST on Tuesday, include a 25% duty on imports from Mexico and Canada and an increase in tariffs on Chinese goods to 20%.
President Donald Trump justified the move by accusing these nations of failing to curb the influx of fentanyl and its precursor chemicals into the U.S. The decision threatens to disrupt approximately $2.2 trillion in annual trade and has already triggered swift retaliatory measures.
China was the first to respond, announcing additional tariffs of 10%-15% on certain U.S. imports starting March 10. Additionally, Beijing imposed new export restrictions on 25 U.S. firms, particularly those involved in arms sales to Taiwan.
Canada followed suit, with Prime Minister Justin Trudeau declaring immediate 25% tariffs on C$30 billion ($20.7 billion) worth of U.S. goods. If the U.S. duties remain in place after 21 days, an additional C$125 billion ($86.2 billion) in tariffs will be imposed, targeting key American exports such as beer, wine, bourbon, home appliances, and Florida orange juice.
Meanwhile, Mexico is expected to outline its response during a scheduled news conference led by President Claudia Sheinbaum.
The newly implemented 20% tariff on Chinese goods builds on a series of previous trade measures, including a 10% tariff introduced in February as part of the administration’s efforts to penalize Beijing over the U.S. fentanyl crisis. The increase applies to key consumer electronics such as smartphones, laptops, video game consoles, smartwatches, and Bluetooth devices—products that had largely been spared in earlier trade disputes.
China’s retaliatory tariffs focus on U.S. agricultural exports, including certain meats, grains, cotton, fruits, vegetables, and dairy products. The Chinese government has also condemned the new measures as a violation of World Trade Organization (WTO) rules, warning that they undermine economic cooperation between the two nations.
In Canada, Ontario Premier Doug Ford has suggested that the province may cut off shipments of nickel and electricity to the U.S. in response to the tariffs.
Economists and business leaders are raising concerns that the tariffs could destabilize North America’s highly integrated supply chains, particularly in key industries such as automotive manufacturing, energy, and agriculture.
The Canadian Chamber of Commerce has warned that the tariffs could lead to widespread job losses and economic downturns, calling the move "reckless." Industry leaders in the U.S. are also voicing opposition, with the American Automotive Policy Council urging an exemption for vehicles that meet the U.S.-Mexico-Canada Agreement’s regional content requirements.
Financial markets have already reacted negatively, with global stocks tumbling and safe-haven bonds gaining traction. The Canadian dollar and Mexican peso both weakened against the U.S. dollar following the announcement.
Since taking office in January, Trump has pursued an aggressive trade policy, including the reinstatement of 25% tariffs on steel and aluminum imports, which will take effect on March 12. In addition, the administration has launched investigations into lumber and wood imports, digital services taxes, and copper imports—moves that could further strain trade relationships with the European Union and Canada.
Trump is expected to highlight his "America First" trade agenda in his address to Congress on Tuesday night, reinforcing his push for reciprocal tariffs to counter foreign trade barriers.
As tensions rise, global markets and policymakers remain on edge, watching closely for further retaliatory actions from affected countries.