Canada Follows Mexico, Trudeau Imposes 25% Retaliatory Tariffs On US As Trump Escalates Trade War

Canadian Prime Minister Justin Trudeau has announced that his government will impose 25 per cent tariffs on American goods worth 155 billion Canadian dollars in response to US President Donald Trump's decision to levy 25 per cent tariffs on all imports from Canada, effective from Tuesday.

"Tariffs violate a free trade agreement that was negotiated a few years ago. Tariffs will have real consequences for the American people. This will include immediate tariffs on C$30 billion worth of goods as of Tuesday. This will be followed by further tariffs on C$125 billion worth of American products in 21 days' time," Trudeau stated at a press conference late on Saturday.

Photo Credit: AP/PTI file photo

"We are considering several non-tariff measures, including some relating to critical minerals, energy procurement, and other partnerships."

Earlier on Saturday, Trump signed an executive order imposing a 10 per cent duty on all imports from China and 25 per cent tariffs on imports from both Mexico and Canada. However, energy imports from Canada, including oil, natural gas, and electricity, would be taxed at a lower rate of 10 per cent.

The order also includes a mechanism to escalate tariffs if the affected countries retaliate. The decision, however, risks sparking an economic standoff with Mexico and Canada-America's two largest trading partners-while also potentially worsening inflation.

Shortly after Trump's announcement, Trudeau posted on X that he would be speaking with Mexican President Claudia Sheinbaum soon, having already met with Canadian premiers to discuss the issue.

"We did not want this, but Canada is prepared," he asserted.

Meanwhile, Mexico has also announced its own retaliatory tariffs against the United States, with President Sheinbaum declaring: "Nothing by force; everything by reason and right."

Trudeau Warned of Immediate Response

A day before Trump's executive order, Trudeau had warned of a "forceful and immediate response" should the US proceed with its tariff plan.

"No one-on either side of the border-wants to see American tariffs on Canadian goods... We're working hard to prevent these tariffs, but if the US moves ahead, Canada's ready with a forceful and immediate response," he posted on social media.

Ontario Premier Doug Ford also condemned the tariffs, stating that "Canada now has no choice but to hit back and hit back hard."

"Canada has so much of what America needs: high-grade nickel and other critical minerals, energy and electricity, uranium, potash, aluminium. We need to maximise our points of leverage and use them to maximum effect. The federal government also needs to pursue every legal route to challenge these unfair, unjustified and illegal tariffs," he added.

In Nova Scotia, Premier Tim Houston took an immediate step by directing that all alcohol imported from the US be removed from the province's store shelves.

'Nothing by Force' - Mexico Retaliates

On Saturday night, Mexican President Claudia Sheinbaum announced retaliatory tariffs against the United States, while maintaining that her country was taking a "calm and measured" approach in weighing its options.

"I'm calm, I've been saying since yesterday, because I know that Mexico's economy is very powerful, very strong," she remarked at an earlier event.

However, in a detailed statement on social media, she criticised Trump's decision and reaffirmed Mexico's position: "We categorically reject the White House's slander against the Mexican government of having alliances with criminal organisations, as well as any intention of intervention in our territory."

She added: "Problems are not resolved by imposing tariffs, but by talking and dialoguing, as we did in recent weeks with your State Department to address the phenomenon of migration; in our case, with respect for human rights... I instruct the Secretary of Economy to implement Plan B that we have been working on, which includes tariff and non-tariff measures in defence of Mexico's interests."

Trump's Tariffs - Fulfilling Campaign Promises

Trump's decision to impose tariffs on Canada and Mexico aligns with campaign promises he made after returning to the White House, despite warnings that a new trade war could disrupt global economic growth.

Following his victory in the November 2024 presidential election, Trump pledged to "sign all necessary documents" to impose a 25 per cent tariff on Mexico and Canada.

He stated that Mexico must stop "illegal aliens" from crossing its border with the US, while Canada must curb the flow of fentanyl and other drugs. "Until such time as they do, it is time for them to pay a very big price!"

On Saturday, he followed through by signing three separate executive orders on tariffs after spending the day golfing in Florida. He vowed that the duties would remain in place until the national emergencies related to fentanyl and illegal immigration were resolved.

A White House fact sheet indicated that the tariffs would persist "until the crisis alleviated," but it did not specify what actions the three countries would need to take in order to secure a reprieve.