HONG KONG — China and Canada will move swiftly on Tuesday to retaliate against newly imposed US tariffs, announcing their own taxes on US goods, further disrupting trade with the top three US trading partners.
The 25% US tariff on almost all goods imported from Canada and Mexico came into effect shortly after midnight on Tuesday, adding a 10% tariff on goods from China. The three countries accounted for more than 40% of the US total imports last year, and are also the top three export markets in the US.
China will charge up to 15% additional charges on some US goods, the government said, but Canada has pledged a tariff of up to 25%. Mexican President Claudia Sinbaum is expected to release her response at a press conference in Mexico City on Tuesday morning, the country’s economy ministry said.
The new China tax, which will take effect on March 10, includes a 15% tariff on chicken, wheat, corn and cotton, and a 10% tariff on sorghum, soybeans, pork, beef, fruits, vegetables, dairy and fish products. China’s state media previously reported that US agricultural products would be included.
According to China, US tariffs undermine cooperation between the two biggest economies in the world, and they are hurting American businesses, consumers, and international trade.
“Chinese people have never believed in coercion or intimidation, and they don’t succumb to bullying or hegemonic tactics,” China’s Foreign Ministry spokesman Lin Jiang said during a regular briefing in Beijing on Tuesday.
“Pressure, threats, and coercion are not the right way to engage with China. If the US is trying to put extreme pressure on China, it’s simply to target the wrong country and miscalculate its movement.”
Lin also said that China has “taken strong measures” to block the international flow of fentanyl, which it cited as justification for tariffs in China, Canada and Mexico, and that the US is using fentanyl as an excuse to launch a trade war.
In addition to the new tariffs, China has added 10 US companies to its “unreliable entities” list and 15 to its export control list. This is a defense and intelligence company that is mostly barely exposed to the Chinese economy.
Beijing is also suing the World Trade Organization over the new 10% tariffs, just as President Donald Trump has responded to the past 10% tariffs he has imposed on Chinese goods since February 4th.
The sum of US tariffs on Chinese goods maintained the tariffs that Trump imposed during his first term, and in some cases increased significantly by former President Joe Biden.
Canada said it plans to go ahead with its previous plan to impose a 25% tariff on Canadian dollars ($107 billion) if US tariffs take effect on schedule.
Canadian Prime Minister Justin Trudeau said in a statement late Monday that tariffs on goods worth $20.7 billion will be in place soon, but tariffs on the remaining $86.3 billion in US products will begin on the 21st. They will remain until US trade measures are withdrawn, he said.
“Due to tariffs imposed by the US, Americans are paying more for groceries, gas and cars and could lose thousands of jobs,” Trudeau said. “Taxes disrupt very successful trading relationships. They violate the very trade agreement negotiated by President Trump in his previous period.”
Trump, who had been threatening tariffs on Canada and Mexico since November, has accused him of not halting the international trends of fentanyl and other illegal drugs.
Fentanyl precursor chemicals are known to be shipped from China to Mexico, where they are processed into deadly opioids and then smuggled into the US, but Canada says it doesn’t play a practical role in the international flow of fentanyl.
According to US Customs, only 0.2% of the over 20,000 pounds of fentanyl seized at the US border in 2024 came from Canada.
Trudeau said Canada has stepped up its drug enforcement efforts, bringing fentanyl attacks from Canada down another 97% from December to January to 10, to £0.03.
The Canadian and Mexican tariffs issued in an executive order signed by Trump on February 1 were pending for 30 days after leaders from both countries announced moves to strengthen border security. It also includes a 10% tariff on Canadian energy imports.
U.S. stocks fell on Monday as Dow Jones Industrial Arage said it had 650 points (1.48%) and the S&P 500 fell 1.76% on the worst day of the year as tariffs in Canada and Mexico went as planned.
In Asia, CNBC reports that LEDs have declined in markets around the region, with inventory dropping by almost 2%. Mainland China and Hong Kong stocks have been muted.
US-China tariffs signal yearly priorities and goals, including approaches to the Trump administration, as Chinese leaders and lawmakers meet in Beijing this week to be the National Congress of the year, the nation’s largest political event of the year.
China has spared US farming in response to the initial 10% tariffs, but “Trump’s impatience tariff attacks may be changing the calculations,” said the US agricultural sector “should start to feel in a pinch,” said Tianchen Xu, senior economist at Beijing’s Economist Intelligence Unit.
“It sounds like he’s telling us, ‘If it doesn’t stop, we’re going to really hit you hard,'” he said in an email.
Meanwhile, in Canada, retaliation for US tariffs could also extend to individual states. Ontario Prime Minister Doug Ford told NBC’s “Meet the Press Now” on Monday that Canada will “react like they’ve never seen before.”
He said he was ready to retaliate by blocking power from his state to the US.
“I’m sorry to the Americans that your president has decided to do this,” Ford said. “I apologize, but he has no choice.”
