America’s closest neighbors, Canada and Mexico, excoriated President Donald Trump for slapping historic tariffs on goods from their countries.
Trump’s broad tariffs went into effect on Tuesday, along with increased duties on goods from China, a move that prompted a swift retaliation from Beijing.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement.
Goods entering the U.S. from Mexico and Canada will carry a 25% tariff, while those from China will be subject to a 10% increase on existing tariffs, according to the White House.
U.S. tariffs are at their highest level since 1943, Yale’s Budget Lab said.
This combination of file photos shows, from left, U.S. President Donald Trump in Palm Beach, Fla., Feb. 7, 2025, Canadian Prime Minister Justin Trudeau in Kyiv, Ukraine, June 10, 2023, China’s President Xi Jinping in Brasilia, Brazil, Nov. 20, 2024, and Mexico’s President Claudia Sheinbaum in Mexico City, June 27, 2024.
On Feb. 27, Trump alleged that illicit drugs such as fentanyl had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue.
Since September, nearly all fentanyl seized by the U.S. came through the Southern border with Mexico, according to the U.S. Customs and Border Patrol, or CBP, a federal agency. Less than 1% of fentanyl was seized at the Northern border with Canada, CBP found.
Canadian Prime Minister Justin Trudeau sharply criticized the tariffs, calling them a “dumb” policy that does not “make sense.”
The reason for the tariffs is based on a false allegation about Canada as a major source of drugs entering the U.S., Trudeau added.
“It’s an example of [Trump] not really being able to see what it is that he wants, because even the excuse that he’s giving for these tariffs today of fentanyl is completely bogus, completely unjustified [and] completely false,” Trudeau said.
Trudeau also slammed Trump for warming relations with Russian President Vladimir Putin in discussions about the Russia-Ukraine war. “They’ve chosen to do this while appeasing Putin,” Trudeau said.
In response, Canada slapped a 25% retaliatory tariff on $30 billion worth of goods. Tariffs on an additional $125 billion worth of products will take effect in 21 days, Trudeau said.
“We will not back down from a fight,” Trudeau added, saying Canadians would punish the U.S. with their pocketbooks.
“We are going to stop consuming American products,” Trudeau said, pointing to public anger spotlighted at recent sporting events during which Canadians booed the U.S. national anthem. “We are going to continue to boo the U.S. anthem. We aren’t booing the America people — just this unjust policy.”
Ontario Premier Doug Ford, who leads the nation’s most populous province, said his government could end a contract with Elon Musk-owned satellite internet service Starlink and shut off power to the U.S.
“We will retool for new markets and new customers,” Ford said.
Hours after Trudeau’s remarks, Trump vowed to impose additional tariffs in response to Canada’s countermeasures.
“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!” Trump said in a post on Truth Social.
A Home Depot worker walks past stacks of U.S. lumber available for sale at Home Depot on March 3, 2025 in Pasadena, California.
Meanwhile, Mexican President Claudia Sheinbaum also slammed the tariffs and announced plans to impose retaliatory tariffs.
Sheinbaum rebuked remarks made by Trump on Monday alleging that “vast amounts of fentanyl” have entered the U.S. from Mexico. Sheinbaum cited CBP data showing that seizures of fentanyl from Mexico declined 50% between October 2024 and January 2025.
“There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Sheinbaum said. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no.”
Sheinbaum said she will speak over the phone with Trump on Thursday, and if no deal can be reached, she’ll announce the tariff and non-tariff measures at a rally on Sunday.
China’s response
Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.
Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.
The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.
A commercial truck drives towards the Ambassador Bridge to Windsor, Ontario, Canada from Detroit, Michigan. U.S., March 3, 2025.
Stock prices plummet
Stocks tumbled on Tuesday hours after the tariffs took effect.
The Dow Jones Industrial Average dropped nearly 800 points, or 1.8%; while the S&P 500 also fell 1.8%. The tech-heavy Nasdaq tumbled 1.6%.
Traders work on the New York Stock Exchange floor on March 3, 2025 in New York City.
Spencer Platt/Getty Images
Shares of retail giant Target fell 4.5% in early trading on Tuesday, following an earnings release from the company that cited “tariff uncertainty” as a potential impediment for the business. Walmart’s stock price dipped 1% on Tuesday, while Amazon shares fell 2%.
Shares of Best Buy plummeted more than 13%. The sharp drop came after Best Buy CEO told analysts that price increases are “highly likely” as a result of the tariffs.
German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 4, 2025.
Higher costs for car production could also pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
Shares of Ford tumbled 3% on Tuesday, while General Motors dropped more than 4%. Stellantis — the parent company of Jeep and Chrysler — saw shares plummet more than 7%.
United Autoworkers, which represents workers at Ford, General Motors and Stellantis, applauded the tariffs as a means of preventing carmakers from replacing U.S. workers with low-paid employees abroad.
“Corporations have been driving a non-stop race to the bottom by killing good blue-collar jobs in America to go exploit some poor worker in another country by paying poverty wages,” UAW said in a statement to ABC News.
“Tariffs are a powerful tool in the toolbox for undoing the injustice of anti-worker trade deals,” UAW added. “We are glad to see an American president take aggressive action on ending the free trade disaster that has dropped like a bomb on the working class.”
ABC News’ Zunaira Zaki and Anne Laurent contributed to this report.
