Canadian Prime Minister Justin Trudeau wasted no time reacting to U.S. President-elect Donald Trump’s announcement of sweeping tariffs on Mexican, Canadian, and Chinese goods.
The controversial move, shared on Trump’s Truth Social platform, sent global currencies spiraling and drew sharp international attention.
Trump’s Bold Tariff Proposal
In his Monday night post, Trump declared plans to impose a 25% tariff on all Mexican and Canadian imports, citing their perceived failure to curb illegal immigration into the U.S. Additionally, he proposed a 10% tariff on Chinese goods, alleging Beijing’s reluctance to execute drug dealers, as promised. These measures, he claimed, would take effect on his first day in office and remain in place until illegal immigration and fentanyl trafficking cease.
“This tariff will stay until drugs, especially fentanyl, and illegal aliens stop invading our country,” Trump wrote, urging Canada and Mexico to address what he called a “long-simmering problem.”
Trudeau and Trump’s Late-Night Call
Just hours later, Trudeau reportedly called Trump at his Mar-a-Lago estate for a “constructive” discussion on trade and border security, according to a Canadian official speaking to The New York Times. Following the call, the Canadian government issued a statement emphasizing the deep economic ties between the two nations.
“Canada is essential to U.S. domestic energy supply, with 60% of U.S. crude oil imports originating from Canada last year,” read the joint statement from Trudeau, Finance Minister Chrystia Freeland, and Public Safety Minister Dominic LeBlanc.
Industry Leaders and Officials React
Canadian industry representatives expressed cautious optimism. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, suggested Trump’s post could be a negotiating tactic.
“We are beyond partners. We are almost as inseparable as family,” Volpe noted, highlighting the interconnected supply chains of North American auto manufacturing.
Ontario Premier Doug Ford took a firmer stance, calling for a united “Team Canada” response and urging Trudeau to convene an emergency meeting with provincial leaders.
Mixed Reactions from Mexico and China
While Mexican officials remained silent initially, Economy Minister Marcelo Ebrard had previously indicated that Mexico might retaliate with tariffs of its own. Meanwhile, China’s embassy in Washington dismissed Trump’s accusations about fentanyl, warning against the consequences of a trade war.
“No one wins a trade war,” said embassy spokesperson Liu Pengyu, pointing to China’s efforts to combat drug trafficking and emphasizing the mutual benefits of U.S.-China trade.
Markets React to Tariff Threats
Trump’s announcement caused immediate ripples in global markets. The Chinese yuan dropped to its weakest point in four months, while the Mexican peso and Canadian dollar each tumbled about 1%. In contrast, the U.S. dollar strengthened, signaling a surge in haven demand.
“This may just be a taste of what’s to come,” warned Mingze Wu, a currency trader at StoneX Financial, highlighting the potential for further instability if Trump’s tariffs become reality.
A Potential Violation of Trade Agreements
Trump’s proposal also raised questions about its legality. Experts pointed out that imposing such tariffs would breach the United States-Mexico-Canada Agreement (USMCA), signed by Trump himself in 2020.
For now, world leaders and industry officials are bracing for what could be a dramatic start to Trump’s new administration, as his bold threats continue to dominate headlines and unsettle markets.
