U.S. President Donald Trump 25% tariffs on goods from Mexico and Canada took effect from Tuesday, pushing North America closer to a regional trade war and sending financial markets reeling.
Trump’s comments made on Monday triggered a selloff in global stocks and pushed bond yields lower. The Mexican peso and Canadian dollar both fell following his remarks.
“They’re going to have to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs,” Trump said at the White House.
He said there was “no room left” for a deal that would avert the tariffs by curbing fentanyl flows into the United States.
Trump also reaffirmed that he will increase tariffs on all Chinese imports to 20% from the previous 10% levy to punish Beijing for failing to halt shipments of fentanyl to the U.S.
The president said in an order that China “has not taken adequate steps to alleviate the illicit drug crisis.”
CEOs and economists say Trump’s tariffs on Canada and Mexico, covering more than $900 billion worth of annual U.S. imports, will deal a serious setback to the highly integrated North American economy.
Advertisement · Scroll to continueThe tariffs are scheduled to take effect at 12:01 a.m. EST, opens new tab (0501 GMT) on Tuesday, the Trump administration confirmed in Federal Register notices. At that point, the U.S. Customs and Border Protection agency will begin collecting 25% on Canadian, opens new tab and Mexican
, opens new tab goods, with a 10% duty for Canadian energy.
The additional Chinese tariffs will also kick in at that deadline.
Canada said it would retaliate with 25% tariffs on C$155 billion ($107 billion) worth of U.S. goods if Trump’s tariffs went into effect, Prime Minister Justin Trudeau said Monday evening, and urged the White House to reconsider.
Trudeau said Canadian tariffs will go into effect for C$30 billion of products at the same time as U.S. tariffs on Tuesday, while duties on the remaining C$125 billion of U.S. goods will apply in 21 days.
“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau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.
