US President Donald Trump has imposed 25 percent tariffs on imports from Mexico and Canada, and doubled tariffs on Chinese goods to 20 percent.
Tariffs are paid by the importer and not the exporter. Impacted nations have planned retaliatory tariffs, as well as electricity export taxes.
Trump enforced a 10 percent tariff on China last month and repeatedly threatened the same against Canada and Mexico. He claimed that the tariffs were due to the countries not doing enough to stop fentanyl from entering the US.
Canadian Prime Minister Justin Trudeau called the reason “completely bogus” and said that Trump just wanted to cause “the total collapse of the Canadian economy because that will make it easier to annex us.”
His nation plans to retaliate with an immediate 25 percent tariff on C$30bn (US$21bn) of US imports and tariffs on another C$125bn (US$87bn) of US goods 21 days later.
Canada's most popular state, Ontario, has said it will cancel a $100 million contract with Starlink, the satellite Internet service provided by Elon Musk's SpaceX. Musk is a close adviser to the Trump administration, and has been vocally in favor of the tariffs.
Ontario also plans to enforce a 25 percent export tax on electricity provided to three US states - New York, Michigan, and Minnesota - and said that it might cut off power entirely if tariffs continue. State Premier Doug Ford also said that Ontario could block the export of critical minerals could be blocked.
“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the US, our Reciprocal Tariff will immediately increase by a like amount!” Trump said on his media platform Truth Social. He has called Prime Minister Trudeau 'governor' as part of his campaign to make the allied nation the 51st US state.
China, meanwhile, has announced additional tariffs of 10 percent and 15 percent on specific US imports from March 10 and plans to levy a series of new export restrictions for designated US entities.
Mexico is expected to announce its tariffs on Sunday.
Global stock markets fell on the news, erasing gains made since Trump's inauguration, totaling around $3.4 trillion.
