President Donald Trump’s long-awaited tariffs against Canada and Mexico went into effect Tuesday after he made clear that, unlike last month, there would be no last-minute reprieve. The 25 percent tax on imports from two of America’s top trading partners has plunged the country into a trade war, and unchartered economic territory.
As Trum prepares to address the nation Tuesday night in his first joint address to Congress this term, it’s unclear how long the tariffs will remain in effect. Commerce Secretary Howard Lutnick signaled in an interview on Tuesday that the president is potentially close to a resolution that could be announced as soon as tomorrow.
“Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they’ll do better and the president is listening because you know he’s very very fair and very reasonable,” he said, in a sentiment that Trump’s trading partners probably wouldn’t agree with. “So I think he’s gonna work something out with them.”
The Dow Jones Industrial Average had already dropped by 650 points at the end of Monday, and markets continued to fall on Tuesday as the tariffs went into effect, wiping out all of Wall Street’s post-election gains. The Dow ended up down 670 points by the end of the day.
The fallout from American allies was also swift.
Mexican president Claudia Sheinbaum denounced Trump’s actions during a press conference, indicating that her government is prepared to retaliate. She said that she has a call with Trump scheduled for Thursday and will announce how exactly Mexico will respond during a public event on Sunday.
“There is no reason, rationale, or justification to support this decision that will affect our people and nations,” she said per Reuters.
Canadian prime minister Justin Trudeau said that his government has already levied retaliatory tariffs against the U.S. “Canada will be implementing 25 percent tariffs against $155 billion worth of American goods. Starting with tariffs on $30 billion worth of goods immediately and tariffs on the remaining $125 billion of American products in 21 days’ time,” he said.
In strong remarks, Trudeau suggested that the tariffs were intended to harm Canada financially and that they stem from Trump’s repeated aims to annex Canada and make it the 51st state:
Trudeau also made a direct plea to the American people, framing Canada’s move as an unavoidable consequence of their government’s actions. “We don’t want this. We want to work with you as a friend and ally. And we don’t want to see you hurt either, but your government has chosen to do this to you,” he said.
Trump called out Trudeau following his announcement, writing on social media, “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”
Republicans leaders appear mixed on Trump’s tariffs. Senate majority leader John Thune signaled his hopes that the taxes will be quickly resolved. “I’m hoping they’re a means to an end and not the end itself. I think they’re hopefully temporary — designed to achieve a specific result,” he said.
House Speaker Mike Johnson, however, seemed willing to give the measure and the president the benefit of the doubt. “This is to continue good relationships and trade policies. I think this initiative will achieve that desired result,” Johnson said. “As the president said, just have a little patience with this. Let it play out, see how it develops, and I think at the end of the day America is going to be better off.”
In addition to the new taxes on Canada and Mexico, Trump increased the current tariffs on China from 10 percent to 20 percent. This sparked a response from China, which levied tariffs of up to 15 percent on U.S. agricultural products including wheat, soybeans, and meat per the New York Times.
