US tariffs take effect: Canada, Mexico face 25% rate, China 20%

Move marks escalation in trade tensions under President Donald Trump's second administration

 

After months of tense negotiations, the United States has implemented new tariffs against three of its largest trading partners: Canada, Mexico and China. 

 

The measures took effect at 12:01am on Tuesday, March 4 (Eastern Standard Time), marking an escalation in trade tensions under President Donald Trump's second administration.

 

 

Details of the New Tariffs

The tariffs imposed on Tuesday include a 25% import tax on Canadian and Mexican goods. 

 

President Trump justified these measures by claiming that both nations, along with China, have failed adequately to prevent illegal drugs, particularly fentanyl, from entering the United States. 

 

Trump says Mexico and Canada have exhausted all avenues to avoid these tariffs.

 

For China, an additional 10% import tax has been imposed, which, when combined with existing tariffs implemented in February, brings the total to 20%. 

 

The US administration cited China's continued shipment of fentanyl into American territory as the primary justification.

 

When questioned about the possibility of further increases to Chinese tariffs, Trump indicated that this would partly depend on China's response, though he expressed doubt that Beijing would retaliate severely.

 

Trump also confirmed that the planned Reciprocal Tariff measure, which will apply to all countries that impose import duties on American goods, remains scheduled to take effect on April 2.

  

Trading Partners Respond


Canada Implements Matching 25% Tariffs


Canadian Prime Minister Justin Trudeau announced that Canada will implement retaliatory measures with equivalent rates, effective immediately. 

 

The first round of 25% tariffs on US imports worth $20.8 billion began on Tuesday. A second round of tariffs on US imports valued at $107 billion will follow in 21 days.

 


"Our tariffs will remain in effect until the United States' trade actions are rescinded. If the US fails to lift these tariffs, we will engage in serious discussions with provinces and territories to implement various non-tariff measures," Trudeau declared.


 


China Targets Agricultural Goods


After expressing strong opposition last weekend, China's Ministry of Commerce issued another statement on Tuesday announcing retaliatory measures against the new 10% US import tariffs. 

 

The ministry reiterated that the Trump administration is attempting to "shift blame" and "bully" Beijing over the fentanyl issue.

 

On Monday, Global Times, a Chinese state media outlet, reported that China is focusing on American "agricultural products" and "food items" as targets for both tariff and non-tariff countermeasures. 

 

Another state publication, People's Daily, outlined Beijing's planned response, referencing tactics similar to those used when the European Union imposed tariffs on Chinese electric vehicles last year.
  


Mexico Adopts Wait-and-See Approach


President Claudia Sheinbaum said on Monday that Mexico would wait to see if Trump follows through on his tariff threats before announcing specific countermeasures. She said Mexico has contingency plans ready regardless of the US decision.

 

"We have plans B, C and D," Sheinbaum remarked, without elaborating on the details of these contingency measures.

 

Last week, Mexican officials met with their American counterparts in Washington to discuss trade and security policies in an effort to prevent the tariff implementation.

 

 

Market Impact

Asian stock markets closed the Tuesday morning session with significant losses in response to the US tariff implementation, continuing the downward trend from the morning opening.

 

Japan's Nikkei index closed the morning session at 37,096.51 points, down 688.96 points (1.82%). 

 

Hong Kong's Hang Seng index ended the morning at 22,901.24 points, declining 105.03 points (0.46%), while China's Shanghai Composite closed the morning at 3,316.67 points, down 0.26 point (0.01%).

 

Australia's S&P/ASX 200 index fell 1.07%, and South Korea's KOSPI dropped 0.13%.

(2025/03/04-00:00)