'We'll fight to the bitter end': China and Canada retaliate against new Trump tariffs

‘We’ll fight to the bitter end’: China and Canada retaliate against new Trump tariffs

Posted by author March 4, 2025 Jobs

Canada and China swiftly announced retaliatory tariffs against the U.S. on Tuesday, shortly after long-threatened levies by the Trump administration on those countries and Mexico took effect.

President Donald Trump’s new 25% tariffs on imports from Mexico and Canada were imposed at 12:01 a.m. ET, along with a doubling of duties on some Chinese goods to 20%.

Trump’s moves effectively launched new trade conflicts with the U.S.’s top three trading partners and threatened to upend two-way annual trade worth, according to data from the Office of the U.S. Trade Representative, nearly $2.2 trillion in 2024. The tit-for-tat tariffs rattled global markets and restrained U.S. ones.

Trump has accused all three countries of not doing enough to clamp down on drugs like the opioid fentanyl entering the U.S. He says tariffs will boost U.S. manufacturing and prevent other countries from taking American jobs.

Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25% tariffs on $20.7 billion worth of U.S. imports and on another $86.2 billion if Trump’s tariffs were still in place in 21 days. He said previously that Canada would target American beer, wine, bourbon, home appliances, and Florida orange juice.

“Tariffs will disrupt an incredibly successful trading relationship,” Trudeau said, adding that they would violate the U.S.-Mexico-Canada free trade agreement signed by Trump during his first term.

China immediately countered the U.S. duties with 10% to 15% tariffs on some U.S. agricultural product imports.

In a press conference in Mexico City, Mexican President Claudia Sheinbaum said there was “no justification” for Trump’s tariffs and that they were imposed “despite our work against gangs and fentanyl.” Sheinbaum said she plans to announce Mexico’s retaliatory tariffs and other measures against the U.S. on Sunday.

Tariffs are essentially taxes charged on goods imported from another country. They are typically set at a percentage of the goods’ value and usually paid by the importer. The extra costs are generally passed on to the consumer.

Canada and Mexico have enjoyed a virtually tariff-free trading relationship with the U.S. for three decades.

Doubling China’s tariffs

The extra 10% duty on Chinese goods adds to a 10% tariff imposed by Trump in February to punish Beijing over the U.S. fentanyl crisis. The 20% duty comes on top of tariffs of up to 25% imposed by Trump during his first term.

Some of these products saw U.S. tariffs increase sharply under former President Joe Biden, including a doubling of duties on Chinese semiconductors to 50% and a quadrupling of tariffs on Chinese electric vehicles to over 100%.

The 20% tariff will apply to several major U.S. consumer electronics imports from China previously untouched by prior duties, including smartphones, laptops, video game consoles, smartwatches, speakers and Bluetooth devices.

China’s commerce ministry on Tuesday said its new levies, which take effect March 10, include a 15% tariff on chicken, wheat, corn and cotton, and a 10% tariff on soybeans, pork, beef, fruits, and dairy and fish products.

“The unilateral tariff increase by the U.S. harms the multilateral trade system, increases the burden on American businesses and consumers, and undermines the foundation of China-U.S. economic and trade cooperation,” China’s Customs Tariff Commission said in a statement.

Beijing also filed a lawsuit with the World Trade Organization over the new tariffs, as it did in response to the previous 10% tariff the Trump administration imposed on Chinese goods.

Recession fears

Some business leaders said the tariffs on Mexican and Canadian products could have much deep repercussions for a highly integrated North American economy that depends on cross-border shipments to build cars and machinery, refine energy and process agricultural goods.

“Today’s reckless decision by the U.S. administration is forcing Canada and the U.S. toward recessions, job losses and economic disaster,” Canadian Chamber of Commerce CEO Candace Laing said in a statement.

She said the U.S. tariffs will fail to usher in a “golden age” coveted by Trump but instead raise costs for consumers and producers and disrupt supply chains.

“Tariffs are a tax on the American people,” Laing said.

Even before Trump’s tariffs announcement, U.S. data on Monday showed factory gate prices jumped to a nearly three-year high, indicating the new wave of tariffs could potentially soon undercut production. Factory gate prices reflect the price of goods or services before any taxes, shipping, or other fees are added.

Trump’s confirmation Tuesday that the tariffs would go ahead sent financial markets sharply lower with global stocks tumbling and safe-haven bonds rallying. The Canadian dollar and Mexican peso fell against the greenback.

Economists at Capital Economics, a financial consultancy, wrote in investor notes Tuesday that if the U.S. tariffs remain in place it risks plunging Canada and Mexico into recession and slowing global growth more generally.

Tariff actions at a blistering pace

Trump has maintained a blistering pace of tariff actions since taking office in January, including fully restoring 25% tariffs on steel and aluminum imports that take effect March 12, revoking prior exemptions.

Trump’s “America First” agenda, aimed at redrawing trade relationships in favor of the U.S., is expected to be a centerpiece of his Tuesday night address to a joint session of Congress.

Trump on Saturday opened a national security investigation into imports of lumber and wood products that could result in steep tariffs. Canada, already facing 14.5% U.S. tariffs on softwood lumber, would be hit particularly hard.

A week earlier, Trump revived a probe into countries that levy digital services taxes, proposed fees of up to $1.5 million on every Chinese-built ship entering a U.S. port, and launched a tariff investigation into copper imports.

These add to his plans for higher “reciprocal tariffs” to match the levies of other countries and offset their other trade barriers, a move that could hit the European Union economic bloc.

Robert Habeck, Germany’s economy minister, said in a statement that the 27 nations who collectively make up the EU would not be pushed around by Trump if he imposes tariffs on their products.

“We will react with unity and self-confidence,” he said.

And Trudeau, Canada’s leader, said it was the wrong strategy.

“Because of the tariffs imposed by the U.S., Americans will pay more for groceries, gas and cars, and potentially lose thousands of jobs,” he said.

In Beijing, foreign ministry spokesman Lin Jian said that if the U.S. “persists in waging a tariff war, a trade war, or any other kind of war, the Chinese side will fight them to the bitter end.”

Contributing: Reuters