The ongoing trade dispute between the United States and its neighboring allies, Canada and Mexico, has escalated following President Donald Trump’s decision to impose significant tariffs. Both countries have swiftly retaliated with tariffs of their own, affecting a wide range of American products.

Canada and Mexico Respond to U.S. Tariffs

President Trump’s decision to declare an economic emergency and impose tariffs of 10% on all imports from China and 25% on goods from Canada and Mexico has sparked significant backlash. In response, both Canada and Mexico announced retaliatory measures.

Canada imposed a 25% tariff on American goods starting from Tuesday, targeting products such as beverages, cosmetics, and paper products, valued at 30 billion Canadian dollars (roughly €20 billion). A second wave of tariffs includes a broader list of goods, including passenger vehicles, trucks, steel and aluminum products, various fruits and vegetables, as well as beef, pork, and dairy products. This second list is estimated to amount to 125 billion Canadian dollars (€83 billion).

Mexico, while not specifying the exact products or tariff rates, confirmed that it would also impose retaliatory tariffs on U.S. goods, further intensifying the trade dispute.

Diplomatic Tensions and Economic Impact

Despite the escalating tensions, Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum held phone discussions to strengthen their bilateral relations. While their responses were not entirely coordinated, both leaders expressed their commitment to protecting their countries’ economic interests.

The tariffs have created uncertainty for businesses and consumers in both nations, especially since Canada is the largest export market for 36 U.S. states, and Mexico is the U.S.’s largest trading partner.

Trump’s administration has warned that it may escalate the situation further by raising the tariffs if Canada and Mexico continue retaliating. However, Trudeau emphasized that Canada was not seeking to escalate the conflict but would defend its economic interests.

Trump responded on social media, criticizing Canada’s trade surplus with the U.S. and suggesting that without it, “Canada ceases to exist as a viable country.” He further stated that Canada should consider becoming the U.S.’s “51st state” to benefit from lower taxes and better military protection.