Canada and China retaliated immediately with their own tariffs and other measures against the United States after the Trump Administration followed through on its threats of tariffs over the trafficking of fentanyl.
Canadian Prime Minister Justin Trudeau said his country would respond with 25 percent tariffs on $155 billion of American goods. First, $30 billion of goods would be hit on March 4, and then the rest in 21 days' time. Other non-tariff measures may follow.
The Chinese Foreign Ministry said it would add an additional 15 percent tariff on American chicken, wheat, corn, and cotton, and a further 10 percent tariff on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products, Chinese state-owned broadcaster CCTV reported.
China will also subject 25 U.S. firms to further export and investment restrictions, per Reuters.
Newsweek emailed the White House press office outside of normal working hours for comment.
Why It Matters
President Donald Trump had said during remarks at the White House that the 25 percent tariff on imports from Canada and Mexico would take effect on March 4. Canada will also face 10 percent on its energy exports.
The White House also announced that China would be subject to an additional 10 percent on imports, taking the tariff up to 20 percent.
Trump blames China, Canada, and Mexico for not doing enough to stem the flow of the highly potent synthetic opioid fentanyl over its border. He threatened tariffs on imports from these countries unless he was convinced they were doing enough to stop the fentanyl industry.
The White House cited CDC data showing 68 percent of all drug poisoning deaths in the U.S. in 2022 and 2023—216,294 total—were caused by synthetic opioids, primarily fentanyl.
China is the world's major hub for fentanyl production, though it has cracked down on the chemicals used by drug gangs to make it.
Mexico's cartels traffic Chinese-made fentanyl into the U.S. Canada also has a problem with fentanyl production and trafficking, though it is smaller than Mexico's.
China, Canada, and Mexico all insist they are working to tackle the fentanyl problem.
What to Know
Global markets were knocked hard by the reciprocal tariffs amid fears that a fresh trade war is unfolding with significant economic repercussions.
Aside from fentanyl and border issues, a key driver of Trump's "America First" trade policy is to encourage greater domestic manufacturing and agricultural production instead of importing goods from the rest of the world.
Trump views tariffs as a means for either securing what he sees as a fair deal on trade—namely, reciprocation of terms—or protecting domestic businesses and jobs.
But critics argue more tariffs will make Americans worse off by increasing import costs, hurting supply chains, reducing consumer choice, and pushing inflation higher.
What People Are Saying
Canada's Prime Minister Justin Trudeau: "While less than 1 per cent 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 … 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. They will violate the very trade agreement that was negotiated by President Trump in his last term."
A spokesperson for China's Ministry of Commerce to the state-run Xinhua news agency: "What the U.S. side has done is a typical act of unilateralism and bullying in disregard of facts, international trade rules and the voices of all parties … China hopes that the United States will view and handle issues in an objective and rational manner and return to the right track of properly resolving differences through equal dialogue as soon as possible."
Peter Navarro, White House senior counselor for trade and manufacturing, to CNBC: "I don't see the president wavering on any of this because he knows in order to get to a world in which America is strong and prosperous, with real wages going up and factory jobs, this is the path that he has chosen … Please … ask the question, why are we doing this? It's because the world cheats us."
What Happens Next
Mexico is also expected to retaliate, as it has promised to do previously. Newsweek emailed a general mailbox for the Mexican president outside of working hours for comment.
The markets will continue to digest the potential economic consequences of the tariffs.
Trump has promised a sweep of new tariffs from April 2, with a particular focus on agricultural imports, and which will be applied more broadly than just China, Canada, and Mexico.
Inflation data over the next few months will show what impact these tariffs are having on prices, and jobs data will shed light on what's happening to employment as a result.
Newsweek