Trump enacts tariffs on Canada, Mexico, and China

To borrow a phrase from Yoda: “Begun, the Clone Trade War has.” On Saturday, President Trump announced the first major tariffs of his second administration, in a move that sparked retaliatory measures and laid the groundwork for a global trade conflict.

As part of Trump’s order – which takes effect on Tuesday – the US will impose a 25% tariff on imports from Canada and Mexico, 10% levy on energy products from Canada, and 10% tariff on all imports from China.

• The tariffs are being imposed “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” Trump posted on Truth Social.
• Senior Trump administration officials say there are no exemptions to the tariffs, which can be escalated if any of the countries impose retaliatory measures.

The impact

Canada, Mexico, and China are America's three largest trading partners, accounting for 42% of total US imports last year ($1.2+ trillion combined) and serving as essential suppliers for many domestic industries.

A few examples:

• Mexico is the largest supplier of fruit and vegetables to the US, while Canada leads in exports of grain, livestock and meats, poultry and more.
• More than 20% of all cars and light trucks sold in the US were built in Canada or Mexico.
• China supplies more than half (56%) of all shoes sold in the US.
• Canada supplies ~30% of lumber used in the US annually.
• The US gets 75% of its imported toys and sports equipment from China.
• Canada and Mexico are the largest and third-largest exporters of steel to the United States, respectively.

Countries targeted by tariffs weren’t too happy. On Saturday, Canadian PM Justin Trudeau announced a retaliatory 25% tariff on $100+ billion worth of US products. Mexican President Claudia Sheinbaum said she also plans to retaliate with tariff and nontariff measures, while China’s government said the new tariffs violate international rules and vowed to take unspecified countermeasures against the US.

Looking ahead…Trump administration officials say the tariffs will remain in place until the White House is satisfied the targeted countries have dealt with illicit fentanyl moving into the US.

• The new levies will apply to companies that import goods within the US, with at least some of the costs expected to be passed on to consumers.
• Overall, the tariffs effectively represent a tax of $830/year for the average US household in 2025, per estimates published Friday by the nonpartisan Tax Foundation.

📊 Flash poll: Do you agree with the Trump administration’s decision to impose tariffs on Mexico, Canada, and China?

• Yes
• No
• Unsure/other