Donald Trump launches tariff war, orders hefty import duties on Canada, China, Mexico

US President Donald Trump on Saturday signed an order imposing hefty new tariffs of 25 per cent on goods from Mexico and Canada and 10 per cent on imports from China, threatening to ignite a trade war that could disrupt more than $2.1 trillion of annual trade.

Trump has declared a national emergency under the International Emergency Economic Powers Act to back the tariffs, which allows sweeping powers to address crises.

Fulfilling his campaign promise but potentially driving up prices for American consumers, Trump calls the move a strategy to pressure countries into curbing illegal immigration and the smuggling of chemicals used in fentanyl production, while also boosting domestic manufacturing and increasing federal revenue.

“Today’s tariff announcement is necessary to hold China, Mexico, and Canada accountable for their promises to halt the flood of poisonous drugs into the United States,” the White House said in a statement.

While energy products from Canada will have only a 10 per cent duty, Mexican energy imports will be charged the full 25 per cent, the White House officials told reporters. Additionally, for Canada, they said the “de minimis” US tariff exemption for small shipments under $800 would be cancelled.

The White House, said there would be no exclusions from the tariffs and noted that the order includes a mechanism to escalate the rates if the countries retaliate against the US, as they have threatened.

“President Trump is implementing a 25 per cent tariff to be paid for by Mexican producers until Mexico cooperates with the US in the fight against drugs…. President Trump is implementing a 25 per cent tariff on Canadian goods and a 10 per cent tariff on Canadian energy resources until Canada cooperates with the US against drug traffickers and on border security,” the White House statement said.

It added, “President Trump is implementing a 10 per cent tariff on China until we secure the full cooperation of the Chinese government in the fight against fentanyl. China plays the central role in the fentanyl crisis that is destroying American lives”.

RETALIATION LIKELY

Ahead of signing the order, the US had formally informed Canada that tariffs would be imposed, and the Canadian news channel CBC reported they would take effect on Tuesday. The Justin Trudeau government had warned that the country would respond if hefty tariffs are imposed.

Trump’s move is expected to draw retaliatory tariffs, potentially disrupting more than $2.1 trillion in annual two-way US trade with its top three trading partners.

Canada has drawn up detailed targets for immediate retaliation, including duties on Florida orange juice, a source familiar with the plan said. Its broader list of targets could cover $103 billion worth of US imports, but it will hold public consultations before acting, sources said to news agency Reuters.

Mexican President Claudia Sheinbaum has also threatened retaliation, but said she would “wait with a cool head” for Trump’s decision and was prepared to continue a border dialogue with him.

China also vowed to defend its trade interests, though it has been more circumspect. A spokesperson for Beijing’s embassy in Washington said: “There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world”.

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