Wed Mar 05 02:09:53 UTC 2025: ## Trade War Erupts as Trump Slaps Tariffs on Canada, Mexico, and China

**OTTAWA/WASHINGTON D.C.** – A full-blown trade war has erupted, with US President Donald Trump imposing sweeping tariffs on Canadian, Mexican, and Chinese imports. The move, described by Royal Bank of Canada economists as the largest trade shock to Canada in nearly a century, has sparked immediate retaliation and widespread concern about escalating inflation and economic instability.

Trump implemented a 25% tariff on most Canadian goods (excluding energy, which faces a 10% levy) and a similar tariff on Mexican imports. Tariffs on Chinese goods were doubled to 20%. Canada responded swiftly with 25% tariffs on $21 billion worth of US goods, threatening further action within 21 days. Mexico has pledged retaliation, while China has imposed its own tariffs and filed a complaint with the World Trade Organization.

Economists warn that even if these blanket tariffs are lifted, more targeted levies are likely to remain, fueling inflation across North America and beyond. Rachel Ziemba of the Center for a New American Security highlighted the significant economic impact, predicting increased prices and business uncertainty. Brett House of Columbia Business School echoed these concerns, suggesting further tariff increases are likely before any rollback. House criticized Trump’s justification for the Canadian tariffs—stemming undocumented migration and fentanyl—as based on “absolutely false” data, citing evidence of increased illegal drug and gun flows from the US into Canada.

The escalating tensions have cast a shadow over the Canada-US relationship. Canadian Prime Minister Justin Trudeau accused Trump of aiming for the “total collapse of the Canadian economy,” while experts like Vina Nadjibulla of the Asia Pacific Foundation of Canada described the situation as an “existential fight.” Some Canadian estimates suggest the tariffs could cost 1.5 million jobs and trigger a recession.

While US Commerce Secretary Howard Lutnick hinted at a possible compromise, analysts agree that the damage to North American trade relations is substantial and will likely persist. The crisis highlights the need for Canada to strengthen its economic resilience and diversify its trading partners. Concerns have also been raised about the potential for the conflict to extend beyond trade, impacting areas like foreign policy and defense. The situation leaves the future of the Canada-US relationship, and indeed North American trade, deeply uncertain.

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