Mexico, Canada, China, EU vow firm response to Trump tariffs

OTTAWA/MEXICO CITY/BEIJING/BRUSSELS: Mexico and Canada, the top two US trading partners, immediately vowed retaliatory tariffs, while China said it would challenge Trump’s move at the World Trade Organisation (WTO) and take other “countermeasures”. In three executive orders, Trump imposed 25% tariffs on Mexican and most Canadian imports and 10% on goods from China, starting on Tuesday. He vowed to keep the duties in place until what he described as a national emergency over fentanyl, a deadly opioid, and illegal immigration to the US ends. The White House provided no other parameters for determining what might satisfy Trump’s demands.

Responding to concerns raised by oil refiners and Midwestern states, Trump imposed only a 10% duty on energy products from Canada, with Mexican energy imports facing the full 25% tariff.

Canadian Prime Minister Justin Trudeau said Canada would respond with 25% tariffs against $155 billion of US goods, including beer, wine, lumber and appliances, beginning with $30 billion taking effect Tuesday and $125 billion 21 days later.

Trudeau warned US citizens that Trump’s tariffs would raise their grocery and gasoline costs, potentially shutting down auto assembly plants and limiting supplies of goods such as nickel, potash, uranium, steel and aluminum. He urged his own citizens to forego travel to the US and to boycott US products.

Mexican President Claudia Sheinbaum, in a post on X, said she was instructing her economy minister to implement retaliatory tariffs but gave no details. Canada and Mexico said they were working together to face Trump’s tariffs.

China’s Commerce Ministry did not specify its planned countermeasures. Its statement left open the door for talks between Washington and Beijing.

“China hopes that the US will view and handle its own fentanyl and other issues in an objective and rational manner,” it said, adding that Beijing wanted to “engage in frank dialogue, strengthen cooperation and manage differences.”

A White House fact sheet said the tariffs would stay in place “until the crisis alleviated,” but gave no details on what the three countries would need to do to win a reprieve.

At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all US imports from Canada, according to US Census Bureau data.

Automakers would be particularly hard hit, with new steep tariffs on vehicles built in Canada and Mexico burdening a vast regional supply chain where parts can cross borders several times before final assembly.

The tariff announcement makes good Trump’s repeated threat during the 2024 presidential campaign and since taking office, defying warnings from top economists that a new trade war with the top US trade partners would erode US and global growth, while raising prices for consumers and companies.

Republicans welcomed the news, while industry groups and Democrats issued stark warnings about the impact on prices.

National Foreign Trade Council President Jake Colvin said Trump’s move threatened to raise the costs of “everything from avocados to automobiles” and urged the US, Canada and Mexico to find a quick solution to avoid escalation.

The three countries should work together to “gain a competitive advantage and facilitate American companies’ ability to export to global markets,” Colvin said in a statement.

Provincial officials and business executives in Canada also reacted with outrage, calling for forceful tariffs on imports from the US.

Roughly 90 minutes after Trump’s announcement, the American national anthem was booed in the nation’s capital Ottawa ahead of the opening face-off at the Ottawa Senators and Minnesota Wild National Hockey League game. The Senators won 6-0.

US tariff collections are set to begin at 12:01am on Tuesday, according to Trump’s written order. But imports that were loaded onto a vessel or onto their final mode of transit before entering the US before 12:01am Saturday would be exempt from the duties.

Trump declared the national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs, which allow the president sweeping powers to impose sanctions to address crises.

Trade lawyers said Trump was once again testing the limits of US legislation and the tariffs could face legal challenges, while Democratic lawmakers Suzan DelBene and Don Beyer decried what they called “a blatant abuse of executive power.”

White House officials said there would be no exclusions from the tariffs and if Canada, Mexico or China retaliated against American exports, Trump would likely increase the US duties.

Nova Scotia’s Premier Tim Houston said he directed that all alcohol imported from the US be removed from the province’s store shelves.

The White House officials said that Canada specifically would no longer be allowed the “de minimis” US duty exemption for shipments under $800. The officials said Canada, along with Mexico, has become a conduit for shipments of fentanyl and its precursor chemicals into the US via small packages that are not often inspected by customs agents.

Meanwhile, China’s government on Sunday denounced the Trump administration’s imposition of a long-threatened 10% tariff on Chinese imports while leaving the door open for talks with the US that could avoid a deepening conflict.

Beijing will challenge President Donald Trump’s tariff at the World Trade Organisation and take unspecified “countermeasures” in response to the levy, which takes effect on Tuesday, the finance and commerce ministries said.

The response stopped short of the immediate escalation that had marked China’s trade showdown with Trump in his first term as president and repeated the more measured language Beijing has used in recent weeks.

China’s commerce ministry said in a statement that Trump’s move “seriously violates” international trade rules, urging the US to “engage in frank dialogue and strengthen cooperation”.

Filing a lawsuit with the WTO would be a largely symbolic move that Beijing has also taken against tariffs on Chinese-made electric vehicles by the European Union.

For weeks Chinese Foreign Ministry spokesperson Mao Ning has said Beijing believes there is no winner in a trade war.

China’s sharpest pushback on Sunday was over fentanyl, an area where the administration of Trump’s predecessor, Joe Biden, had also been urging Beijing to crack down on shipments of the China-made precursor chemicals needed to manufacture the drug.

Meanwhile, the European Union (EU) insisted Sunday it would retaliate “firmly” if US President Donald Trump hit it with tariffs, as Brussels decried his sweeping measures against Canada, Mexico and China.

Brussels until now has said it hopes to avoid a trade conflict with Trump through negotiation.

But on Friday the US leader doubled down by saying he “absolutely” planned to target the EU in future, after first slapping levies on his North American neighbours and China.

“The European Union regrets the US decision to impose tariffs on Canada, Mexico and China,” said a spokesman for the European Commission.

“Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides.”

The spokesman said “the EU would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods”.

“At this time, we are not aware of any additional tariffs being imposed on EU products,” he added.

He said the 27-nation EU remained committed to low tariffs to “drive growth and economic stability within a strong, rules-based trading system”.

And he reiterated the EU’s commitment to its trade and investment relationship with the United States -- “the biggest in the world”. “There is a lot at stake,” said the spokesman. “We should both be looking at strengthening this relationship.”

Trump has not hidden his enmity for the EU, accusing it of treating the United States “very, very unfairly” on trade.

Tensions have also risen over his repeated insistence that he wants to take Greenland from EU member Denmark.

Back in 2018, during his first term, Trump imposed tariffs on European steel and aluminum exports -- leading the EU to respond with its own higher duties. As a result, Europe has been gaming out scenarios for months to ensure it is ready this time around, should he decide to unleash a new trade conflict with the bloc.