Trump tariffs: Canada, Mexico pledge retaliation on US goods

02/02/2025February 2, 2025

What goods and services could be affected by the tariffs?

The Trump tariffs could impact the prices of many goods in the US, including groceries, gas and other consumer items.

Mexico and Canada are both among the US' top suppliers of fruit, vegetables, and other food items, according to the US Department of Agriculture.

Between 2017 and 2021, Mexico supplied the US with 31% of imported horticultural products including fruit, vegetables and alcoholic beverages, the department said.

Meanwhile, US Energy Information Administration statistics suggest that Canada accounts for over half the US's imported crude oil.

The US reliance on Canadian crude oil has nearly doubled in the last decade, jumping from 33% in 2013 to 60% in 2023, the administration says.

Trump's tariffs are exceptionally lower on Canadian oil imports, coming in at 10% against the 25% tariff he has imposed on other Canadian imports.

Automobiles and auto parts are also among the major imports from Canada and Mexico. Many car and electronics giants have manufacturing plants in Mexico, including Honda, Samsung and LG. 

US imports from China, meanwhile, include textile products, furniture, bedding, lamps, toys, games, sports equipment and paint, according to 2021 figures from the US Department of Commerce.

Trump had imposed tariffs on China in his first term, in a move which forced many companies in trade with the US to relocate to Canada and Mexico to evade them. These companies are now bracing for the new wave of tariffs. 

The National Retail Federation (NRF), which represents the largest retailers in the US, told Reuters news agency the White House should explore other ways to achieve its policy goals.

"As long as these universal tariffs are in place, Americans will be forced to pay higher prices on everyday consumer goods," said David French, NRF executive vice president of government relations.

02/02/2025February 2, 2025

Why is Trump imposing tariffs and what do they mean?

 Trump is invoking the International Emergency Economic Powers Act in imposing the tariffs, with the White House saying "the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency."

In 2023, Canada and Mexico bought US goods and services worth $808 billion (€768 billion), according to the US Department of Commerce's Bureau of Economic Analysis.

At the same time, Canada and Mexico sent $1.01 trillion worth of goods to the US. The US trade deficit with Canada is over $40 billion, while the trade deficit with Mexico is over $162 billion.

Most economists think tariffs will increase prices for American consumers.

Trump hopes for a different effect.

For the US president, tariffs are a way to cut the country's "unfair" trade deficit, add to domestic manufacturing capacity through a buy American push and generate government revenue.

Additionally, tariffs are a handy tool in other negotiations like the country's war on drugs and keeping out immigrants along the southern border.

"The economic consequences of such tariffs would be severe for North America, potentially causing significant disruptions to growth and trade relations," wrote Julian Hinz last week.

The research director for trade policy at the Kiel Institute for the World Economy calculates this could lead to a 4.1% drop in GDP for both Mexico and Canada in the first year, since around three-quarters of their total exports go to the US.

Others, like the Peterson Institute for International Economics, say a 25% tariffs on Canadian and Mexican goods would cause pain for all three. For Canada it will be bad, but for Mexico it would be "catastrophic" since they are more dependent on the US. It would eventually drive up some prices in the US.

Read more here: Trump tariffs: What do they mean for Mexico and Canada?

02/02/2025February 2, 2025

China: 'Fentanyl is America's problem'

US President Donald Trump has demanded that Beijing stem the flow of fentanyl, a deadly synthetic opioid, into the United States.

Following the tariffs announcement, Chinese diplomats said their country had "carried out extensive anti-narcotics cooperation with the United States and achieved remarkable results."                      

"Fentanyl is America's problem," China's foreign ministry said. "

The country commerce ministry also commented on the issue:

"China hopes that the United States will objectively and rationally view and deal with its own issues like fentanyl, rather than threatening other countries with tariffs at every turn," they said.

02/02/2025February 2, 2025

China 'dissatisfied' with 10% tariff

China said it "firmly opposes" the new tariffs announced by US President Donald Trump and promised "corresponding countermeasures to resolutely safeguard our own rights and interests."

China's commerce ministry criticized Washington's "erroneous practices" and said Beijing was "strongly dissatisfied with this and firmly opposes it."

The ministry said Beijing would file a lawsuit at the World Trade Organization.

In a separate statement, China’s foreign ministry said "there are no winners in a trade war or tariff war."

"The practice of imposing additional tariffs is not constructive and will inevitably affect and damage future bilateral cooperation on drug control," a ministry spokesperson said.

02/02/2025February 2, 2025

Canada's Trudeau vows 'consequential' tit-for-tat tariffs on US goods

Canadian PM Justin Trudeau responded with 25% tariffs against $155 billion worth of American goodsImage: IMAGO/ZUMA Press

Canadian Prime Minister Justin Trudeau said that Canada would be imposing tariffs on American goods in response to US President Donald Trump's import tax decision.

"Tonight I am announcing Canada will be responding to the US trade action with 25% tariffs against $155 billion worth of American goods," Trudeau said.

Trudeau began his address to Canadians with a message directed at American consumers.

"It will have real consequences for you, the American people," he said, saying it would result in higher prices on groceries and other
goods.

"We're certainly not looking to escalate. But we will stand up for Canada, for Canadians, for Canadian jobs," Trudeau said, as he warned of a fracture in longstanding Canada-US ties.

The announcement came after Trudeau met with Canadian lawmakers. 

"We did not want this, but Canada is prepared," Trudeau said before the announcement in a post on X.

On Friday, Trudeau had warned of a "forceful and immediate response" if the US followed through with the threat of tariffs.

02/02/2025February 2, 2025

US President Donald Trump announces tariffs on Canada, Mexico and China

US President Donald Trump signed an executive order on Saturday imposing 25% tariffs on goods from Mexico, as well as 25% on goods from Canada except for Canadian energy resources which will face 10% in tariffs. 

The duties on Canada will take effect on Tuesday. The document also imposes a 10% tariff on imports from China.

According to the White House, the executive order includes a retaliation clause, meaning further measures are possible if the targeted countries respond with measures of their own.

The move hits America's biggest trading partners. In 2023, Canada and Mexico bought US goods and services worth $808 billion (€768 billion), according to the US Department of Commerce's Bureau of Economic Analysis.

At the same time, Canada and Mexico sent $1.01 trillion worth of goods to the US. The US trade deficit with Canada is over $40 billion, while the trade deficit with Mexico is over $162 billion.

Trump invoked the International Emergency Economic Powers Act in imposing the tariffs, with the White House saying "the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency."

02/02/2025February 2, 2025

Mexican president pledges to 'defend Mexico's interests'

Mexico's President Claudia Sheinbaum accused Trump of "slander" and announced that her country would be imposing retaliatory tariffs.

"We categorically reject the White House's slander against the Mexican government of having alliances with criminal organizations, as well as any intention of intervention in our territory," said Mexico's President Claudia Sheinbaum.

Commenting on Trump's demands to curb fentanyl smuggling, the Mexican leader said her government had seized over 40 tons of drugs including 20 million doses of fentanyl over a four-month period.  Sheinbaum also said that ten thousand people had been arrested.

The Mexican leader stressed that Mexico did not want confrontation but rather collaboration and said "if the United States wants to combat criminal groups that traffic drugs and generate violence, we must work together in an integrated manner."

Sheinbaum also said that she had ordered her economy minister to implement tariff and non-tariff measures to defend Mexico's interests.

"I've instructed my economy minister to implement the plan B
we've been working on, which includes tariff and non-tariff
measures in defense of Mexico's interests," Sheinbaum posted on X,
without specifying what US goods are expected to be targeted.

As of November 2024, Mexico was the largest US trading partner, with exports and imports of goods comprising nearly 16% of total trade, according to the US census bureau. 

rmt,dj,kb/wmr (AFP, AP, dpa, Reuters)