Canada retaliates against the US: 25 percent tariff imposed

Newspunjab

2 Feb 2025

US President Donald Trump signed an order on Saturday imposing tariffs on Canada, Mexico and China. The Trump administration says its aim is to stop drugs and illegal immigrants from entering the country. Canada and Mexico have also retaliated after Trump’s tariff announcement. Canada on Sunday imposed a 25 percent tax on $155 billion worth of goods imported from the US. Mexican President Claudia Sheinbaum has also ordered her Finance Minister to implement tariff and non-tariff measures to protect the country’s interests. China’s Ministry of Commerce has not yet announced any tariffs but has decided to file a complaint against the US at the ‘World Trade Organization’. However, Trump’s order also includes a mechanism that can increase tariff rates if countries retaliate against the US.

The decision could potentially disrupt Trump’s political mandate to deal with the global economy and inflation. Inflation is likely to rise in the US. However, Trump posted on social media that the decision was necessary to protect the American people. 

 The tariffs, which take effect Tuesday, could create a crippling situation in North America that could stifle economic growth. A new analysis by Yale’s Budget Lab details the potential damage to the U.S. economy, estimating that the average American household would lose $1,170 in tax revenue, the Associated Press reports. Economic growth would slow and inflation would rise. The situation could get worse if Canada, Mexico and China retaliate.