Tariff War Heats Up: Canada, Mexico Retaliate As Trump Imposes New Trade Restrictions

Canadian Prime Minister Justin Trudeau has announced a 25 per cent tariff on US goods amounting to 155 billion Canadian dollars.

The move comes in response to US President Donald Trump's decision to impose 25 per cent tariffs on all Canadian imports, starting Tuesday.

"Tariffs violate a free trade agreement that was negotiated a few years ago. Tariffs will have real consequences for the American people. This will include immediate tariffs on C$30 billion worth of goods as of Tuesday. This will be followed by further tariffs on C$125 billion worth of American products in 21 days time," Trudeau said at a news conference late Saturday.

Trudeau noted that Canada is also exploring non-tariff measures, including options concerning critical minerals, energy procurement, and partnerships.

Earlier on Saturday, Trump signed an executive order to place 10 per cent duties on all Chinese imports and 25 per cent tariffs on imports from Mexico and Canada.

Canadian energy exports, including oil, gas, and electricity, will be taxed at a reduced 10 per cent rate.

The order includes provisions for further tariff hikes if retaliatory measures are taken.

However, the decision could lead to economic tensions with Mexico and Canada—America’s top trading partners—and worsen inflation in the country.

Trudeau acknowledged during the press conference that "the next few weeks will be difficult for Canadians and Americans."

"This trade action by the Americans and our response is going to have real consequences for people and for workers on both sides of our border. We don't want to be here, we didn't ask for this. But we will not back down in standing up for Canadians," he said.

Shortly after Trump's announcement, Trudeau tweeted that he would speak with Mexican President Claudia Sheinbaum and had already met with Canadian premiers to discuss the issue.

Mexico has also announced retaliatory tariffs, with President Claudia Sheinbaum stating, "nothing by force; everything by reason and right."

After Trump won the November 2024 presidential election, he announced that he would “sign all necessary documents” to impose a 25 per cent tariff on Mexico and Canada.

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