The U.S. president moves carefully around China, punishes Mexico, and presses Canada into becoming the 51st U.S. state.

On 1 February 2025, the White House announced the imposition of significant tariffs on imports from Canada, Mexico, and China, marking a substantial shift in U.S. trade policy. The administration cited concerns over illegal immigration and the unfair trade deals as primary motivations for these measures.

Speaking before his supporters, President Donald Trump said Canada should have accepted his offer to become the 51st American state, a way that would have spared the northern neighbor from the new tariffs.

From 4 February, the goods from Canada and Mexico – the northern and southern neigbors – will be levied a 25% tariff while China has been imposed a 10% tariff on its exports to the U.S./ Additionally, Canadian energy products face a 10% tariff.

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The reasoning about immigration may be justified as concerning Mexico, which is a passage for immigrants – including illegals – into the United States, but has nothing to do with Canada. As revealed by Prime Minister Justin Trudeau in his official reaction to the news, Canada accounts for less than 1% of fetanyl and illegal crossings into the U.S.

The government in Ottawa underlined that Canada is the top customer for U.S. goods and services exports and a critical supplier of goods and services integral to the U.S. economy, with Canada buying more U.S. goods than China, Japan, France and the United Kingdom combined.

Retaliatory measures

In response to the U.S. tariffs, Canada and Mexico have announced countermeasures. Prime Minister Justin Trudeau declared a 25% tariff on $155 billion worth of U.S. goods, encompassing a wide range of consumer products. Trudeau emphasized that these tariffs could adversely affect U.S. jobs and lead to higher prices for American consumers.

In Mexico, President Claudia Sheinbaum refuted the U.S. allegations linking Mexico to criminal groups and suggested that the U.S. should address its internal drug issues. Sheinbaum indicated that Mexico is considering both tariff and non-tariff retaliatory measures and called for dialogue to resolve the dispute.

The Chinese government announced plans to file a complaint with the World Trade Organization – where the U.S. is still a member – and vowed to implement corresponding actions, though specific measures have yet to be detailed.

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Economists warn that these tariffs could have far-reaching consequences. They are expected to increase prices for American consumers on various goods, including cars, food, and electronics. Estimates suggest that the average U.S. household could incur additional costs exceeding $2,600 annually.

As for Canada and Mexico, given their economic dependence on the U.S. market, the sustained 25% tariffs could potentially lead to recessions in both countries. The disruption of supply chains and increased costs for consumers are significant concerns.

President Trump's enforcement of new tariffs on Canada, Mexico, and China represents a bold move towards economic nationalism. While intended to address pressing issues such as illegal immigration and drug trafficking, the approach carries significant risks.

It marks the beginning of a new wave of trade wars, with economic disruptions and increased costs for consumers.

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