Trade war erupts as Trump hits Canada, Mexico and China with tariffs
President Trump's 25% tariffs on Canada's and Mexico's exports to the U.S. and new levies on China took effect early Tuesday.
Why it matters: Trump's confirmation of the tariffs sent markets sliding Monday amid fears it could raise prices for U.S. customers, see inflation soar and start a trade war β and Canada and China took retaliatory action against U.S. products as tariffs targeting their countries took effect.
- After Chinese exports were hit with an additional 10% tariff on top of the 10% Trump had imposed earlier this year, officials in Beijing announced 15% tariffs on some U.S. agriculture imports, including chicken, corn, cotton and wheat.
- Canada, which is also facing 10% tariffs on energy products, announced a raft of countermeasures.
Zoom in: Canadian Prime Minister Justin said in a statement Monday Canadian officials would move to impose 25% tariffs against "$155 billion of American goods" at 12:01am Tuesday, when he noted Trump's "unjustified" tariffs were due to take effect.
- Canada would start with tariffs on "$30Β billion worth of goods immediately, and tariffs on the remaining $125Β billion on American products in 21 days' time," Trudeau said.
- "Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures," Trudeau added.
- "Because of the tariffs imposed by the U.S., Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs. Tariffs will disrupt an incredibly successful trading relationship."
State of play: Trump last month struck a deal on border security with Canadian and Mexican officials and paused for 30 days his threat to impose on the countries his planned tariffs, but the president made clear on Monday no progress had been made during negotiations.
- Trump was proceeding with implementing the tariffs on Canada and Mexico "to combat the extraordinary threat to U.S. national security, including our public health posed by unchecked drug trafficking," per a White House statement early Tuesday.
- The White House said Trump gave Canadian and Mexican officials "ample opportunity to curb the dangerous cartel activity and influx of lethal drugs flowing into our country," but "they have failed to adequately address the situation."
What they're saying: Trudeau said in his statement while less than 1% of the fentanyl intercepted at the U.S. border comes from Canada, "we have worked relentlessly to address this scourge that affects Canadians and Americans alike."
- He pointed to Canada implementing a $1.3 billion border plan "with new choppers, boots on the ground," increased resources to stop the flow of fentanyl and a Canada-U.S. Joint Strike Force on organized crime was being established.
- Trudeau said such efforts, along with appointing a Fentanyl Czar, listing transnational criminal cartels as terrorist organizations and working in partnership with the U.S. on the issue, had resulted in a 97% drop in fentanyl seizures from Canada between December and January to "a near-zero low of 0.03 pounds seized by U.S. Customs and Border Protection."
- There was no immediate response from Mexican officials to the tariffs, but President Claudia Sheinbaum told reporters on Monday she had a plan for if they were to take effect and would provide details on Tuesday.
- Representatives for the White House did not immediately respond to Axios' request for comment.
Go deeper: Trump tariffs will cause price hikes on these everyday goods
Editor's note: This article has been updated with new details throughout.