Canada strikes back, Mexico prepares, Trump firm.
Canada Retaliates with $107 Billion in Tariffs as Trump Stands Firm, Mexico Prepares for Impact
As US President Donald Trump refuses to back down on his high tariff plans against neighboring nations, Canada has announced a massive retaliatory move. Prime Minister Justin Trudeau confirmed that his government would impose $107 billion (155 billion Canadian dollars) in counter-tariffs on American goods, escalating trade tensions between the two long-standing allies.
The first wave of these tariffs, amounting to 30 billion Canadian dollars, will take effect on Tuesday, with the remainder—totaling 125 billion Canadian dollars—to be implemented within the next 21 days. Trudeau made it clear that Canada would not stand idle while the United States disrupts trade relations with protectionist policies.
Canada Hits Back with Tariffs, Seeks Alternatives
He also signaled that Canada is actively exploring non-tariff measures in coordination with provinces and territories to counter Washington’s economic pressure.
While Trudeau’s government initially sought diplomatic channels to prevent the tariff war, the failure of negotiations left Canada with no choice but to impose its own economic measures. The tariffs will primarily target key US exports, affecting industries such as agriculture, manufacturing, and consumer goods.
Trump’s Tariff War Expands Beyond China
The escalating tensions with Canada come amid Trump’s broader trade offensive, which has already seen tariff hikes on Chinese imports. The US recently doubled tariffs on Chinese goods from 10% to 20%, prompting swift retaliatory actions from Beijing, including new trade restrictions on American firms.
Now, Washington’s aggressive trade policies have extended to North America. The Trump administration has justified its tariff moves as necessary to protect domestic industries and reduce trade deficits. However, critics argue that these policies could severely impact American businesses that rely on imports from Canada and Mexico.
Mexico Prepares for US Tariffs, Holds Back Details
Like Canada, Mexico is also bracing for the economic fallout from Washington’s tariff hike. On Monday, Mexican President Claudia Sheinbaum reassured businesses and investors that the country has backup plans ready should the United States impose tariffs.
“We have a plan B, C, D,” Sheinbaum told reporters, without disclosing specific countermeasures. The Mexican government has reportedly been in talks with trade officials to explore alternative markets and new trade partnerships to cushion the potential economic blow.
Mexico’s preparedness suggests that it is considering both diplomatic and retaliatory economic strategies, though officials remain tight-lipped about specific actions.
Economic Impact and Market Reactions
With both Canada and Mexico responding to US tariff threats, the North American trade landscape is entering a volatile phase. Businesses on all sides are preparing for disruptions in supply chains, increased costs, and economic uncertainty.
Market analysts warn that a prolonged tariff war between the US and its closest allies could destabilize industries dependent on cross-border trade. The automobile sector, agricultural exports, and consumer electronics are among the industries most vulnerable to these escalating trade restrictions.
What’s Next?
Despite growing economic tensions, the possibility of negotiations remains. However, with all three nations firm in their respective positions, a resolution may not come quickly. Canada has shown its willingness to fight back, Mexico has a strategy in place, and the US under Trump remains determined to enforce its tariff policies.
As the new tariffs take effect in the coming days, businesses and policymakers will be closely watching whether Washington, Ottawa, and Mexico City can reach a diplomatic compromise—or if this trade dispute will spiral further, impacting economies beyond North America.