- U.S. Faces Trade War With Key Partners as Trump Implements 25% Tariffs
US President Donald Trump reaffirmed his decision to impose a 25 percent tariff on all Mexican and Canadian imports, starting Tuesday. This decision is expected to ignite a full-blown trade war with the United States’ largest trading partners.
“There’s no room left for Mexico or for Canada” to negotiate an exemption, Trump told reporters at the White House. “They’re all set. They go into effect tomorrow.”
The tariffs will hit over $900 billion worth of goods imported from Canada and Mexico in 2024, accounting for roughly 28 percent of total U.S. imports. The affected products include automobiles, auto parts, agricultural goods, industrial products, and consumer goods.
This move, combined with Trump’s escalation of tariffs on Chinese imports, is part of his broader strategy to pressure trade partners on immigration, drug trafficking, and what he describes as unfair trade practices.
Major U.S. automakers have expressed concern over the impact of these tariffs on their supply chains. The auto industry in North America has been deeply integrated for decades, with parts and vehicles moving across borders multiple times before completion.
Industry leaders have urged Trump to exempt automobiles and auto parts that comply with the stringent regional content requirements of the United States-Mexico-Canada Agreement (USMCA), a trade deal Trump himself negotiated during his first term. However, the president gave no indication that any exemptions would be granted.
“What manufacturers will have to do is build their car plants, frankly, and other things in the United States, in which case they [will] have no tariffs,” Trump said Monday.
Several corporate executives and trade experts have warned that the tariffs could lead to higher prices for consumers, disruptions in supply chains, and even job losses in industries dependent on cross-border trade.
“The economic consequences of these tariffs will be severe,” said John Bozzella, president of the Alliance for Automotive Innovation. “U.S. car prices will rise, supply chains will be thrown into chaos, and American workers will be hurt.”
Retailers and agricultural producers have also raised alarms. Farmers, who rely on export markets for survival, fear immediate retaliation from trading partners.
In addition to the tariffs on Mexico and Canada, Trump announced Monday that he would be raising tariffs on all Chinese goods from 10 percent to 20 percent. This builds on the tariffs he imposed on over $300 billion worth of Chinese products during his first term.
The Chinese government has already retaliated against the 10 percent tariffs imposed last month and is now considering additional tariffs on U.S. agricultural and food products, according to a report in the Chinese state-run Global Times.
Trump declined to specify how much further he was willing to increase tariffs on China, stating that it would depend on Beijing’s actions to curb fentanyl exports—a crisis he has repeatedly blamed for thousands of U.S. overdose deaths.
Both Canada and Mexico have vowed to retaliate if the tariffs take effect. Canadian Premier Doug Ford issued a stark warning on Monday.
“If they want to try to annihilate Ontario, I will do everything, including cut off their energy, with a smile on my face … and I’m encouraging every other province to do the same,” Ford said in Toronto.
Mexican officials have also indicated they will respond with countermeasures targeting key U.S. exports, including corn, pork, and machinery.
Commerce Secretary Howard Lutnick defended the administration’s decision, arguing that while Mexico and Canada have improved border security, they still need to do more to stop the fentanyl crisis.
“They’ve done a good job on the border. They haven’t done enough on fentanyl,” Lutnick said in an interview with CNN.
The administration has maintained that the main goal of the tariffs is to push Mexico and Canada into stronger actions against drug cartels.
During Monday’s announcement, Trump also previewed another wave of tariffs set to begin on April 2. His new “reciprocal tariff plan” will impose duties that mirror the levels of tariffs and regulatory barriers other countries impose on U.S. exports.
“Reciprocal tariffs start on April 2,” Trump said, joking that he avoided starting them on April 1 to not be mistaken for an April Fool’s joke.
Under this plan, the U.S. will examine not just traditional tariffs but also non-tariff barriers such as quotas, subsidies, and regulations that disadvantage U.S. companies in foreign markets.
American farmers—who have already suffered from years of trade tensions—are bracing for impact, as Canada, Mexico, and China are among the largest buyers of U.S. agricultural exports.
Trump tried to reassure farmers in a Truth Social post on Monday.
“To the Great Farmers of the United States, get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!”
However, experts say this ignores the reality that many U.S. farms produce far more than domestic demand can support.
“There simply isn’t enough domestic demand for all the crops we grow,” said Tom Vilsack, former Agriculture Secretary. “Farmers depend on export markets to survive. Retaliatory tariffs could be devastating.”
The financial markets reacted swiftly to Trump’s announcement, with stocks tumbling Monday afternoon. The Dow Jones Industrial Average fell by 600 points, while the S&P 500 and Nasdaq also saw steep losses.
Many economists warn that broad tariffs could slow economic growth, increase consumer prices, and damage global trade relationships.
Despite this, Trump remains confident in his tariff strategy.
“They can’t come in and steal our money and steal our jobs and take our factories and take our businesses and expect not to be punished—and they’re being punished by tariffs,” he said.
Throughout his presidency, Trump has relied heavily on tariffs as his primary economic weapon. Despite warnings from economists and business leaders, he continues to argue that other countries bear the costs—not Americans.
“Tariffs are a very powerful weapon that politicians haven’t used because they were either dishonest, stupid, or paid off in some other form,” Trump declared.
With the 2024 election behind him, Trump is doubling down on the aggressive trade policies that defined his first term. His escalating tariff strategy with Mexico, Canada, and China could have far-reaching consequences—potentially boosting domestic manufacturing in the short term but also risking inflation, job losses, and trade disruptions.
As businesses, farmers, and consumers brace for impact, all eyes will be on how Mexico, Canada, and China choose to retaliate in the coming weeks—and whether Trump’s tariff gamble will pay off or backfire.
