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Canada, Mexico pledge retaliatory tariffs as markets brace for turmoil

Feb 2, 2025, 10:42am EST
businesspoliticsNorth America
The flags of Mexico, the United States and Canada.
Jose Luis Gonzalez/Reuters
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US President Donald Trump’s order to impose tariffs on China, Canada, and Mexico sparked immediate reprisals and heightened fears of global economic upheaval.

Trump on Saturday announced 25% duties on imports from Canada and Mexico (Canadian energy is an exception, at 10%), while Chinese imports face 10% tariffs.

Ottawa and Mexico City vowed to retaliate, likely looking to exert economic and political pressure by targeting US exports from Republican states or with influential lobbies in Washington, analysts said.

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Beijing, meanwhile, pledged unspecified “countermeasures,” leaving the door ajar for possible talks to avoid further damaging China’s beleaguered economy.

Domestic markets — which have so far “really been on Trump’s side” — are primed for turmoil, one investor said: “The market could challenge him for the first time.”

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