U.S. President Donald Trump announced the implementation of a 25% tariff on imports from Canada and Mexico, stating that negotiations had reached a dead end. The tariffs, which had been under discussion for months, were set to take effect on Tuesday, causing a sharp decline in U.S. stock markets.
Additionally, a 10% tariff on Chinese imports was also expected to be enforced, significantly increasing trade restrictions on the U.S.’s three largest trading partners. Speaking from the White House, Trump declared that there was “no room left for Mexico or for Canada” in the negotiations and confirmed that the tariffs were finalized. He justified the move as a response to the influx of illegal drugs and undocumented migrants into the U.S.
Officials from Canada and Mexico had been making last-minute efforts in Washington to prevent the tariffs. Mexican President Claudia Sheinbaum indirectly addressed Trump, asserting that Mexico demands respect, emphasizing cooperation but rejecting subordination. Meanwhile, Canadian Prime Minister Justin Trudeau, speaking at a summit in London, refuted claims that Canada was a major source of illegal fentanyl in the U.S. He highlighted that only 1% of seized fentanyl originates from Canada, according to U.S. data.
In response, Canada warned that the tariffs would harm both economies and pledged to retaliate if necessary. Last month, Canada outlined a countermeasure plan involving tariffs on $30 billion worth of U.S. goods, including items like pasta, clothing, and perfume. Canadian officials, including Internal Trade Minister Anita Anand, reaffirmed their readiness to defend the country’s economy.
The escalating trade tensions have sparked fears of a broader trade war. Canadian Foreign Minister Mélanie Joly described the tariffs as an “existential threat,” putting thousands of Canadian jobs at risk. While discussions with the Trump administration continued, she warned that Canada was prepared to impose counter-tariffs.
Despite concerns about potential economic fallout, Trump defended his approach, arguing that tariffs protect U.S. manufacturing and correct trade imbalances. He suggested that companies could avoid the tariffs by relocating their operations to the U.S. However, markets reacted negatively, with major stock indexes declining— the Dow Jones dropped by 1.4%, the S&P 500 fell 1.75%, and the Nasdaq lost 2.6%.
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