Mexico, Canada hit back at US with counter tariffs: What we know so far

Mexico’s President Claudia Sheinbaum ordered retaliatory tariffs against the US’s promised 25 percent levies on Sunday. Meanwhile, Canadian Prime Minister Justin Trudeau said Canada will place 25% tariffs on $155 billion in US imports in retaliation for Trump tariffs.

Canada and Mexico responded to US President Donald Trump’s decision to implement a “25% tariff on imports from Mexico and Canada (10% on Canadian Energy).” This meant that But energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate.

“This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” Trump said in a post on Truth social.

Trump also imposed tariffs on China. The tariffs would go into effect on Tuesday. His order includes a mechanism to escalate the rates if the countries retaliate against the U.S, the Associated Press reported.

What did Mexico say?

Mexico’s President Sheinbaum immediately ordered retaliatory tariffs. Responding on X, Mexican President Claudia Sheinbaum said, “We categorically reject the White House’s slander that the Mexican government has alliances with criminal organizations, as well as any intention of meddling in our territory.”

“If the United States government and its agencies wanted to address the serious fentanyl consumption in their country, they could fight the sale of drugs on the streets of their major cities, which they don’t do and the laundering of money that this illegal activity generates that has done so much harm to its population.”

What did Canada say?

Canadian Prime Minister Justin Trudeau said on Saturday Canada would impose 25% tariffs on C$155 billion ($106.5 billion) of US goods in response to US tariffs. “C$30 billion would take effect from Tuesday and C$125 billion in 21 days,” Trudeau told a news conference.

Earlier in a post on X, Trudeau said that Canada is ready to address the tariffs the US government announced.

On a message on his X account, he was to talk to Sheinbaum about the US administration decision, and later he will speak to Canadians. “We did not want this, but Canada is prepared,” he said. “I’ll be addressing Canadians later this evening,” he added.

What could Trump’s tariffs mean?

A new analysis by the Budget Lab at Yale laid out the possible damage to the US economy. It stated that the average US household would lose the equivalent of $1,170 in income from the taxes.

Economic growth would slow and inflation would worsen — and the situation could be worse if Canada, Mexico and China retaliate, the Associated Press reported.

The report added that the decision throws the global economy and Trump’s own political mandate to combat inflation into possible turmoil, though the Republican president posted on social media that it was necessary “to protect Americans.”

The tariffs risk an economic standoff with America’s two largest trading partners in Mexico and Canada, upending a decades-old trade relationship with the possibility of harsh reprisals by those two nations.

The tariffs also if sustained could cause inflation to significantly worsen, possibly eroding voters’ trust that Trump could as promised lower the prices of groceries, gasoline, housing, autos and other goods.