Trump Tariffs Go Into Effect, Canada Responds With 25% Retaliatory Tariff

President Trump’s trade war has arrived and it’s already having huge repercussions as stock markets are plummeting and retaliatory tariffs are going into effect. This means businesses and consumers will lose, on both sides of the border.

Starting in the United States, the Trump administration has targeted products from Canada and Mexico with a 25% tariff. It will “remain in effect until such time as drugs, in particular fentanyl, and all illegal aliens stop this invasion of our country.”

More: Car Prices Could Surge $12,000 Under New Tariffs With EVs Taking The Biggest Hit

The White House went on to claim that Trump was “implementing tariffs on Canada and Mexico under the International Emergency Economic Powers Act to combat the extraordinary threat to U.S. national security, including our public health posed by unchecked drug trafficking.” The administration also pointed to a “sustained influx of illegal aliens,”  which are “overwhelming our schools, lowering our wages, reducing our housing supply and raising rents, overcrowding our hospitals, draining our welfare system, and causing crime.”

Canada wasted no time in responding as the government said it would “not stand by as the United States imposes unwarranted and unreasonable tariffs on Canadian goods.” As part of this effort, a 25% tariff has been applied immediately to a list of goods worth $20.7 billion ($30 billion CAD).

The list includes 1,256 items including “orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.” Also included are pasta, firearms, and maple sugar / maple syrup.

It’s a long list and it will grow to $106.7 billion ($155 billion CAD) worth of goods if the United States maintains their tariffs on Canadian goods. Targeted items would expand to include electric vehicles, trucks, and buses. Other affected products would include fruits and vegetables, electronics, aluminum, and steel.

The Canadian government went on to note all options are on the table and they’re considering “additional measures.” These could include “non-tariff options,” designed to punish the United States.

Canada called the White House’s claims non-sense as “less than 1 percent of fentanyl and illegal crossings into the United States come from Canada.” The government also noted the tariffs will have “devastating consequences for the American economy and people” as they’ll “pay more at grocery stores and gas pumps, and potentially lose thousands of jobs.”

Officials went on to note “Canada is the top customer for U.S. goods and services … buying more U.S. goods than China, Japan, France and the United Kingdom combined.” The country is also the top export market for 36 U.S. states and 43 states export over $1 billion ($1.5 billion CAD) to Canada every year.

Aside from the official government response, Chrystia Freeland, a Member of the House of Commons and a candidate to replace Prime Minister Justin Trudeau, repeated her threat to hit Tesla with a 100% tariff. She also told MSNBC that Canada could go after other companies affiliated with Elon Musk such as Starlink.

Mexico’s response was muted in comparison, but President Claudia Sheinbaum Pardo said the country will have more to say on March 9. She also claimed that Mexico has taken major steps to address Trump’s concerns in the past 30 days.