In response to US President Donald Trump’s recent executive orders imposing tariffs on Canada, China and Mexico, these countries have retaliated with their own actions. President Trump signed an executive order over the weekend imposing 25 percent tariffs on imports from Canada and Mexico, and a 10 percent tax on goods from China. The move was aimed at addressing issues such as illegal migration and drug trafficking.
According to officials, energy products from Canada will face a 10 percent duty, while Mexican energy imports will be subject to the full 25 percent tariff. President Trump also declared a national emergency to support these tariffs under the International Emergency Economic Powers Act, granting broad powers to address crises.
A statement from the White House underscored the necessity of these tariffs to hold China, Mexico, and Canada accountable for their commitments to combat the flow of harmful drugs into the United States. The announcement cited concerns about fentanyl production in Canada and the increase in illegal border crossings from the country.
Leaders of the affected nations swiftly responded to President Trump’s actions. Canadian Prime Minister Justin Trudeau cautioned Americans about the potential negative impacts of a trade war, emphasizing the risk to jobs and manufacturing facilities. Canada announced plans to impose 25 percent tariffs on $155 billion worth of US goods, including materials, alcohol, fruit, clothing, and appliances.
China expressed strong opposition to the new tariffs imposed by President Trump and pledged corresponding countermeasures to safeguard its interests. Mexican President Claudia Sheinbaum also denounced the allegations linking her government to the fentanyl crisis in the US and announced retaliatory tariffs on American products.
Amidst the escalating trade tensions, President Trump hinted at further tariff increases and mentioned potential targets such as imported computer chips, steel, oil, natural gas, pharmaceutical drugs, and European Union imports. This signals a continuation of tariff measures as a key aspect of his administration’s trade policy.
The Trump administration has imposed a new tariff on China under the International Emergency Economic Powers Act (IEEPA), citing the threat posed by illegal aliens and dangerous drugs like fentanyl. The President emphasized the need to protect Americans and fulfill his campaign promise to curb illegal immigration and drug trafficking across borders.
White House officials confirmed that there would be no exemptions from the tariffs, including canceling the “de minimis” US tariff exemption for small shipments under $800 from Canada. These actions are in line with Trump’s longstanding threat of imposing tariffs and have raised concerns about a potential international trade war.
EY Chief Economist Greg Daco warned that Trump’s tariff plan could reduce US growth by 1.5 percentage points this year, push Canada and Mexico into recession, and lead to domestic stagflation. The economic impact could include negative consequences combined with inflationary pressures and financial market instability.
The deadline set by Trump to address the flow of fentanyl and precursor chemicals from China through Mexico and Canada has sparked tensions with China. Beijing has vowed to retaliate against the tariffs, criticizing Washington’s actions as violating WTO rules and urging the US to address its issues responsibly.
Canadian Prime Minister Trudeau emphasized the enduring friendship and partnership between Canada and the US, despite the current trade disputes. He urged Canadians to refrain from US holidays and assured that Canada would continue to collaborate with its neighbor, emphasizing the strong political, military, economic, and security ties between the two nations.
Encouraging Canadians to support local businesses and opt for domestic holidays instead of traveling to the US, Prime Minister Justin Trudeau stated, “We didn’t seek this situation, but we won’t back down.” Emphasizing the importance of standing up for Canada, its citizens, and jobs, he expressed a desire to avoid escalation while taking a strong stance. The imposed tariffs target American beer, wine, bourbon, fruits, and fruit juices, including orange juice from Florida, as well as items like clothing, sports equipment, and household appliances. In response to the announced US tariffs, Trudeau confirmed Canada’s plan to impose 25% tariffs on $155 billion worth of US goods, with $30 billion taking effect immediately and the remaining $125 billion to follow in 21 days to allow for alternative supply chains to be explored. Additionally, Trudeau cautioned Americans about the potential risk to their jobs and industries due to the tariffs, urging collaboration instead of punitive measures. Moreover, the Mexican government criticized the US for not doing enough to combat the fentanyl crisis within its borders, highlighting the need for preventive measures and addressing issues related to drug consumption and distribution. Lastly, Ontario Premier Doug Ford condemned the tariffs on Canadian products as illegal and warned of potential inflationary effects.
Tariffs imposed by Mr. Trump will have negative impacts on both Americans and Canadians, leading to inflation in both countries. The US Chamber of Commerce warned that these tariffs will raise prices for American families and expressed concern over potential economic harm. British Columbia’s Premier criticized the tariffs, calling it a betrayal of the Canada-US relationship, and announced measures such as removing liquor from Republican-led states from Canadian shelves. East Coast drivers may also face challenges as refining capacity meets only half of the fuel demand, with additional costs likely to be passed on to consumers. The Mexican President remains defiant in the face of tariffs, while Canada’s largest trade union urges swift retaliation to protect workers on both sides of the border.
Canadian Minister: We are Ready to Defend You
Jonathan Wilkinson, Canada’s natural resources minister, reassured Canadians that they had not provoked tariffs from the US. In a post on X, he stated, “I want to reassure each and every Canadian that we are prepared and ready to fight for you.”
Reports from Canadian media, citing senior government sources, suggest that Canada is considering counter-tariffs ranging from $10 billion to $85 billion.
Trudeau Warns of Difficult Times Ahead
Canadian Prime Minister Justin Trudeau warned Canadians of potential challenges ahead and announced that Ottawa was prepared to respond with retaliatory tariffs. He mentioned that Canada is addressing President Trump’s calls for border security with a CDN$1.3 billion (US$900 million) border plan including helicopters, new canine teams, and imaging tools.
Mexico’s Preparedness for Tariffs
Mexican President Claudia Sheinbaum emphasized Mexico’s efforts to reduce illegal border crossings and the trade in fentanyl. She mentioned ongoing dialogue since President Trump’s initial tariff proposals and stated that Mexico has plans in place to respond if necessary.
Trump’s Tariffs Aimed at Protecting Americans
President Trump explained on Truth Social that his tariffs on imports from Mexico, Canada, and China were implemented to protect Americans from illegal drugs and immigrants. He cited the International Emergency Economic Powers Act (IEEPA) as the basis for the tariffs and reiterated his campaign promise to secure US borders.
Executive Order Signed for Tariffs
Donald Trump signed an executive order imposing 25% tariffs on goods from Canada and Mexico and a 10% tax on China. The White House justified the tariffs as necessary to hold these countries accountable for failing to stop the influx of dangerous drugs into the US.
Trump Poised to Enact Tariffs
Donald Trump is set to impose tariffs on major US trading partners Canada, Mexico, and China, citing issues with illegal immigration and drug trafficking. The President plans to implement tariffs as part of his strategy to address these concerns.
Latest Update: 06:25 PM GMT
UK Industries at Risk from Tariffs
If Donald Trump were to impose tariffs on British goods, Britain’s car exports and chemicals sectors would be the most severely impacted. In 2023, the machinery and transport sectors, which include vehicles, accounted for more than double the sales to the US compared to other sectors.
Update: 06:02 PM GMT
Britain’s Concerns Amid Trump’s Trade War
As Donald Trump escalates tariffs on America’s neighbors, including Canada, Mexico, and China, Britain is closely monitoring the situation to avoid being drawn into a full-blown trade war. Products such as Canadian lumber, Chinese smartphones, and Mexican tequila are set to see increased prices in the US. Trump has also hinted at imposing significant tariffs on Brussels, following the levies on other countries over the weekend.
Update: 05:39 PM GMT
Oil Tariffs and Energy Prices
Raising tariffs on crude oil imports, particularly from countries like Canada and Mexico, could have significant implications for US energy prices, according to the Atlantic Council think tank. With a substantial portion of US crude oil imports coming from Canada, any tariff increase could lead to higher energy costs. Trump is considering lowering the tariff rate on oil to potentially 10%, down from the initial 25% proposal.
Update: 05:08 PM GMT
Impact on US Car Industry
The American car industry is facing a major blow from the escalating trade war, with imports from Canada and Mexico accounting for a significant portion of vehicles sold in the US. Tariffs are expected to drive up costs for vehicles as carmakers and suppliers have production facilities across the region. The uncertainty surrounding trade policies has already caused a drop in American auto stocks.
Update: 04:51 PM GMT
Canada and Mexico Brace for Recession
Economists warn that Canada and Mexico could potentially face recessions due to the tariffs imposed by Donald Trump. The trade war could also lead to stagflation in the US, characterized by low growth and high inflation. As tensions rise, concerns about the impact on global economies, including the US, continue to mount.
This year, there has been a 5 percentage point hit. Mr. Daco expressed concerns that sharp tariff increases against US trading partners could lead to a stagflationary shock, a combination of negative economic impact and inflationary pressure, while also causing financial market volatility. The tariffs set to be implemented tomorrow are projected to erase over half of America’s growth by 2025 according to @GregDaco, as shared by Lydia DePillis on January 31, 2025 at 4:34 PM GMT.
Economists suggest that trade tariffs amidst a potential trade war involving the US, China, Canada, and Mexico may not have an immediate effect on the UK. Sanjay Raja of Deutsche Bank mentioned that the UK, being relatively isolated at this stage, might experience minimal indirect impact. Paul Dales of Capital Economics added that the UK’s exposure to US import tariffs is less compared to other economies, expecting any decrease in UK GDP to be marginal. However, Dales highlighted that the car and pharmaceutical sectors are the most susceptible areas in the UK economy. This was reported on January 31, 2025, at 3:53 PM GMT.
While the early part of Trump’s second presidency has been favorable for the Right, recent actions, such as imposing tariffs on imports from Canada, Mexico, and China, may have negative repercussions. The EU is also a target for potential tariffs, including on medicine, pharmaceuticals, steel, and chips. This move has raised concerns about triggering a trade war with Trump’s allies, potentially weakening America. Donald Trump’s tariff announcement was reported on January 31, 2025, at 3:29 PM GMT.
Scotch whisky makers are apprehensive about the potential impact of Trump’s tariffs. Miles Beale, CEO of the Wine and Spirits Association, warned that a trade war with the US could stifle investments and lead to more job losses in the industry. The industry anticipates that UK wines and spirits, including Scotch whisky, could be targeted in the tariff disputes. The brewing trade tension stems from previous tariffs initiated in 2019, which are set to resume in June 2026 unless new agreements are reached between the UK and the US. Industry experts fear a repetition of tariffs could disrupt demand and supply, affecting job security and investments in the sector. This was highlighted by Mr. Beale on January 31, 2025.
The spirits industry is concerned that Scotch whisky may be targeted with tariffs by Donald Trump, and a Canadian prime ministerial candidate is suggesting retaliatory levies on Tesla vehicles. Former Canadian finance minister Chrystia Freeland is advocating for tariffs on Tesla and American wine, beer, and spirits if unfair tariffs are imposed on Canadians. Additionally, borrowing costs have increased in both the UK and the US since Trump’s return to office, leading to doubts about meeting fiscal rules without tax increases or spending cuts. Mexico’s President Claudia Sheinbaum has outlined multiple contingency plans for potential decisions by the US government. The dollar has strengthened following Trump’s tariff announcements, with expectations of weaker sterling and other currencies due to higher US interest rates. Reader opinions vary on Trump’s tariff plans, with some economists warning of potential higher borrowing costs resulting from a global trade war.
The impact of rising US interest rates, rather than tariffs themselves, is causing spillover effects. US and UK bond yields are once again moving in sync, as noted previously. Find more information here: [link]. – Julian Jessop
Mark Carney asserts that Canadians are not willing to make concessions in response to Donald Trump’s tariffs. Carney stated that Canada will retaliate if he becomes the next prime minister, targeting tariffs that will match US tariffs “dollar for dollar.” He emphasized that the impact on the Canadian economy will be swift and more significant in the US. – Julian Jessop
Senator Mark Kelly criticizes Donald Trump’s tariffs, calling them a bad idea that will increase the costs of groceries and other goods. Kelly emphasizes that the notion that other countries will bear the tariff costs is incorrect. – Senator Mark Kelly
President Trump announces plans to impose tariffs on pharmaceuticals, steel, semiconductor chips, oil, and gas. Specific details on the items facing tariffs are yet to be fully disclosed. The President projects the implementation of these tariffs around February 18. – Donald Trump
Trump’s recent tariff announcements targeting Canada, Mexico, and China have the potential to disrupt over $2.1 trillion in annual trade. Trump, currently at Mar-a-Lago in Florida, shows no signs of backing down on the tariffs against the top three US trading partners. The President links the tariffs to border control issues, drug trafficking concerns, and trade deficits. – Donald Trump
There are suggestions that Britain may be spared from the trade disruptions caused by Trump’s tariffs. – Julian Jessop
Economists suggest that Britain is unlikely to be affected by Donald Trump’s tariffs, as the President is targeting countries with significant trade deficits with the United States. Julian Jessop from the Institute of Economic Affairs pointed out that the EU could be the next target based on trade data.
In 2023, the US had a trade deficit of $279.4 billion with China, while the UK also had a trade deficit with the US in goods. However, the UK had a trade surplus with the US in services, resulting in an overall surplus of £71.4 billion in trade in goods and services with the US in 2023.
Despite Trump’s tariff announcements on China, Mexico, and Canada, with the EU potentially next, the UK is expected to be spared from these measures. The market reaction to the tariffs has been relatively muted, with gold prices reaching a record high.
Canada, Mexico, and China have all expressed strong opposition to Trump’s tariff hikes, with each country preparing to defend its trade interests. Canadian prime ministerial candidates have vowed to retaliate if the tariffs are imposed.
As the UK’s largest individual trading partner, a trade war between the US and other countries could have implications for the UK economy, but the extent of the impact remains to be seen.
Britain’s primary focus in trade lies in services, rendering it impervious to the potential impact of escalated tariffs on goods. Notably, the UK contributes a mere 2 per cent to US goods imports. Yet, looming on the horizon is the contentious issue of Britain’s tax policies targeting tech behemoths, a move that could potentially provoke the ire of President Trump as Sir Keir Starmer intensifies his endeavors to secure a favorable trade agreement.
In a recent address from the hallowed halls of the Oval Office, President Trump hinted at the possibility of imposing tariffs on the European Union. His words resonated with a sense of frustration and disillusionment as he expressed, “Am I inclined to levy tariffs on the European Union? Shall I be forthright or diplomatic in my response? Absolutely. The European Union’s treatment of us has been nothing short of egregious.”
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