The United States and its major trading partners are entering a new phase of protectionism as Canada, Mexico, and China announced plans to implement countermeasures against recent tariffs imposed by President Trump.
A diverse array of American goods exported to Canada, valued at over $100 billion, will be subjected to a 25 percent tariff. Prime Minister Justin Trudeau expressed regret over the situation, stating, “We don’t want to be here,” during a televised address from Ottawa.
On the same day, China declared its intention to take corresponding countermeasures and pursue legal action at the World Trade Organization (WTO). Mexican President Claudia Sheinbaum indicated that her government would announce initial steps of a contingency plan if an agreement with the U.S. is not reached, warning of potential retaliatory measures.
The new policy, announced by President Trump, imposes a 25 percent tariff on all goods from Canada and Mexico, with Canadian energy and oil exports facing a 10 percent tariff. Additionally, a 10 percent tariff has been placed on Chinese goods. The changes also eliminate the duty-free allowance for Americans to purchase goods from these countries, impacting businesses that rely on direct shipping from China.
These tariffs are set to take effect just after midnight on Tuesday and will be added to existing tariffs, increasing the overall cost for consumers. President Trump defended the tariffs, acknowledging potential economic repercussions but suggesting that any resulting pain could be justified.
Historically, tariffs have been shown to increase costs for American consumers. While most Republicans in Congress have supported Trump's tariffs, some, like Senator Rand Paul, have criticized them, arguing that they act as taxes that ultimately lead to higher prices and reduced trade.
Democrats have criticized the president, asserting that his actions have contributed to rising costs for everyday Americans. Representative Gabe Vasquez stated that the tariffs would increase prices for essential goods.
The effectiveness of China's potential legal actions at the WTO remains uncertain, as the organization has faced challenges in functioning effectively due to U.S. actions blocking the appointment of judges.
In response to the tariffs, China’s Ministry of Commerce urged the U.S. to address its issues objectively rather than resorting to tariffs, while defending its own regulations on fentanyl-related substances. Similarly, President Sheinbaum of Mexico emphasized the need for the U.S. to focus on domestic issues related to drug sales.
In light of the new tariffs, Prime Minister Trudeau warned that the consequences would also affect American workers, particularly in manufacturing sectors. Canadian provinces have begun to respond by limiting imports of American alcohol products, with some targeting states that support Trump's policies.