U.S. President Donald Trump’s new 25 percent tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20 percent, signaling the beginning of a trade war with America’s top three trading partners.
The new tariffs came into effect at 5:01 GMT following Trump’s statement that all three countries had failed to do enough to limit the flow of fentanyl into the U.S. These tariffs are expected to cut around $2.2 trillion in bilateral trade with the U.S.
China responds with additional tariffs on certain U.S. imports
China responded immediately, announcing additional tariffs of 10-15 percent on certain U.S. imports from March 10. Beijing also placed twenty-five U.S. firms under export and investment restrictions on national security grounds. However, it refrained from including any household names, similar to what it did when it retaliated against the Trump administration’s February 4 tariffs.
China named ten of these 25 firms for selling arms to Taiwan, which China claims as its own territory.
The new U.S. tariffs are an additional hike to preexisting levies on thousands of Chinese goods. Some of these products were impacted by higher tariffs under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50 percent and a quadrupling of tariffs on Chinese electric vehicles to over 100 percent.
The new 20 percent tariff will apply to several U.S. consumer electronics imports from China, including smartphones, laptops, videogame consoles, smartwatches, speakers and Bluetooth devices.
China responded immediately after the deadline, announcing that it would impose an additional 15 percent tariff on U.S. chicken, wheat, corn and cotton and an extra 10 percent tariff on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables, and dairy imports from March 10, the country’s finance ministry announced in a statement.
Canada imposes 25 percent tariffs
Meanwhile, Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25 percent tariffs on $20.7 billion worth of U.S. imports and another $86.2 billion if Trump’s tariffs were still in effect in 21 days. He previously noted that Canada would target American beer, wine, bourbon, home appliances and Florida orange juice.
“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said in a statement.
Trudeau added that the U.S. tariffs violate the U.S.-Mexico-Canada free trade agreement signed by Trump during his first term, noting that this action will disrupt an incredibly successful trading relationship between the two countries.
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Recession fears emerge as Trump’s tariffs pile up
The tariffs on Mexican and Canadian products will have a significant economic impact on both parties. “Today’s reckless decision by the U.S. administration is forcing Canada and the U.S. toward recessions, job losses and economic disaster,” Canadian Chamber of Commerce CEO Candace Laing said in a statement.
She added the U.S. tariffs will raise costs for consumers and producers and disrupt supply chains, noting that “tariffs are a tax on the American people.”
Trump has moved forward with tariff plans at a swift pace since taking office in January. The new administration fully restored the 25 percent tariffs on steel and aluminum imports that take effect March 12, revoking prior exemptions.
On Saturday, Trump opened a national security investigation into imports of lumber and wood products that could result in steep tariffs. Canada, which already faces 14.5 percent U.S. tariffs on softwood lumber, would face new challenges by new tariffs on these goods.
A week earlier, Trump also revived an investigation into countries that levy digital services taxes. He also proposed fees of up to $1.5 million on every Chinese-built ship entering a U.S. port and launched a tariff investigation into copper imports.
These decisions all come on top of his plans for higher reciprocal tariffs to match the levies of other countries and offset their other trade barriers, a move that would hit the European Union the hardest.
