Emmanuel Addeh in Abuja
Canada, Mexico and China have vowed to respond to sweeping new tariffs to their exports to the United States announced by President Donald Trump.
Trump said a levy of 25 per cent on Canadian and Mexican imports as well as an additional 10 per cent tax on Chinese goods would come into force on Tuesday.
The US president said the move was in response to his concerns about illegal immigration and drug trafficking – two of the main promises on which he was elected, BBC reported yesterday.
In response, both Canada and Mexico said they were preparing similar tariffs on US goods, while China added it would take “necessary countermeasures to defend its legitimate rights and interests”.
The implementation of tariffs and the subsequent retaliation could mark the start of a new era of global trade wars.
Economists had warned that the introduction of the import taxes by the US, and the responses from other countries could lead to prices rising on a wide range of products, from cars, lumber, and steel to food and alcohol. But Trump has indicated he is ready to escalate the duties further if the countries retaliate.
“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 on X on Saturday.
Trump posted on his Truth Social platform, “This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our citizens, including fentanyl.”
A tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import. They are a central part of Trump’s economic vision. Trump sees them as a way of growing the US economy, protecting jobs and raising tax revenue – and in this case, pushing for policy action from allies.
Together, China, Mexico and Canada accounted for more than 40 per cent of imports into the US last year. Canada, Mexico and the US have deeply integrated economies, with an estimated $2 billion (£1.6 billion) worth of manufactured goods crossing the borders daily, the BBC report added.
In its announcement, the White House accused Mexico’s government of having “an intolerable alliance” with Mexican drug trafficking organisations.
In her response, Mexican President Claudia Sheinbaum called allegations that the Mexican government had alliances with criminal organisations “slander”. Sheinbaum called on the US to do more to clamp down on the illegal flow of guns south to arm the cartels.
Her country is willing to work with the US, she said. “Problems are not resolved by imposing tariffs, but by talking,” she stressed.
Sheinbaum stated that she had instructed her economy minister to respond with tariff and non-tariff measures. They are expected to include retaliatory tariffs of 25 per cent on US goods.
Similarly, Canadian Prime Minister Justin Trudeau said his country will also respond to the Trump administration tariffs.
“We don’t want to be here, we didn’t ask for this,” Trudeau said at a news conference.
“But we will not back down in standing up for Canadians,” he stressed.
His government will impose 25 per cent tariffs on $155 billion worth of American goods – $30 billion will come into force on Tuesday and another $125 billion in 21 days.
Targeted items include American beer, wine, bourbon, fruits and fruit juices, vegetables, perfumes, clothing and shoes, as well as household appliances, sporting goods and furniture. Lumber and plastics will also face levies.
Non-tariff measures being considered are related to critical minerals and procurement, although Trudeau did not offer more detail.
The Canadian prime minister pushed back on the suggestion the shared border posed a security concern, saying less than one per cent of fentanyl going into the United States comes from Canada.
In a bid to avoid the tariffs altogether, Ottawa had promised to implement $1.3 billion Canadian dollars ($900m; £700m) of new security measures along its US border. “Tariffs are not the best way we can work together to save lives,” Trudeau said.
He also said he had not spoken to Trump since the inauguration, but would keep lines open with US counterparts.
Canada is America’s largest foreign supplier of crude oil. According to the most recent official trade figures, 61 per cent of oil imported into the US between January and November last year came from Canada.
China said in a statement that it was strongly dissatisfied with the levies and “firmly opposes” them. The 10 per cent tax will be added over and above tariffs already imposed on China by Trump in his first term and by President Joe Biden.
China added that it would file a lawsuit with the World Trade Organisation (WTO) against the US for its “wrongful practice”.
“Trade and tariff wars have no winners,” said a spokesperson at China’s Washington embassy.
China’s Vice Premier Ding Xuexiang told the World Economic Forum (WEF) in Davos, Switzerland, last month that his country was looking for a “win-win” solution to trade tensions and wanted to expand its imports.
The auto sector could be especially hard hit. Auto parts cross the three borders multiple times before a final vehicle is assembled. TD Economics suggest the average US car price could increase by around $3,000.
A January report by the Peterson Institute for International Economics suggested blanket 25 per cent tariffs on Canada and Mexico would slow growth and accelerate inflation in all three countries.
The White House, explaining why it was targeting its top trading partners, said Mexican cartels were responsible for trafficking fentanyl, methamphetamine and other drugs.
It said tariffs on Canada would remain until it “co-operates with the US against drug traffickers and on border security”.
It said “China plays the central role in the fentanyl crisis” with exports of the lethal synthetic painkiller.
Both the northern and southern US borders have reported drug seizures, though amounts at the border with Canada are considerably lower than those with Mexico, according to official data.
US border agents seized 43lbs (19.5kg) of fentanyl at the northern border between October 2023 and last September, compared to more than 21,000lbs (9,525.4kg) at the southern border.
