Trump deals with fallout after imposing tariffs on Mexico, Canada and China

Trump’s tariffs against China, Canada and Mexico target a trade provision that helped fuel the explosive growth of budget online retailers, including Temu and Shein.

Trump on Saturday signed executive orders imposing tariffs on the country’s top three trading partners. Goods imported from Canada and Mexico will be slapped with a 25% tariff, while goods from China will be charged a 10% tax. Energy resources from Canada will have a lower 10% tariff. The duties are expected to take effect Tuesday.

The orders against China, Canada and Mexico all halt a trade exemption, known as “de minimis,” which allows exporters to ship packages worth less than $800 into the United States duty free.

The de minimis provision has existed since the 1930s, but its use has come under increasing scrutiny in recent years. The Biden administration took steps in September to curb the “overuse and abuse” of de minimis, arguing it has helped Chinese e-commerce companies undercut competitors with lower prices. Officials have also argued that de minimis shipments are “subject to minimal documentation and inspection,” raising product safety concerns.

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The European Union said today it “regrets” the United States’ choice to impose tariffs on Canada, Mexico and China. It said it is not aware of additional tariffs imposed on E.U. products, but it said that if its members are faced with similar levies, it is ready to “respond firmly.”

“Our trade and investment relationship with the U.S. is the biggest in the world. There is a lot at stake,” a European Commission spokesperson said in a statement.

“The EU firmly believes that low tariffs drive growth and economic stability within a strong, rules-based trading system. However, the EU would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods,” the spokesperson added.

Sen. Mitch McConnell, R-Ky., said in an interview that aired tonight that tariffs Trump launched at Canada and Mexico will "drive the cost of everything up."

McConnell, responding on CBS' "60 Minutes" to a question about levies on imports against U.S. allies, said tariffs would be "paid for by American consumers."

"I mean, why would you want to get in a fight with your allies over this?" he asked.

Canadian prime minister candidate Chrystia Freeland called Trump’s tariffs “a betrayal of America’s closest friend.”

Freeland, a former foreign minister who has negotiated with Trump, said the pretext of fentanyl to justify the tariffs is “ludicrous” and “utter madness.”

“Americans are going to be astonished by the Canadian response. We’re hurt for sure, because we’re your friends and neighbors. But most of all, we’re angry. And we are united and resolute,” Freeland told CNN’s Fareed Zakaria.

Trump told reporters tonight that he will be speaking with Trudeau and "Mexico tomorrow morning." He did not clarify whether he would be speaking with Sheinbaum or someone else from the Mexican government.

"I don't expect anything very dramatic. We put tariffs on, they owe us a lot of money, and I'm sure they're going to pay," he said.

Trudeau and Sheinbaum, both leaders of countries that are U.S. allies, have slammed Trump's tariffs.

Mark Feb. 15 on your calendars.

That Saturday evening, the United States and Canada will face off in a hockey match in Montreal that could be one of the most politically charged sporting events in years. It comes weeks after Trump imposed 25% tariffs on goods across the Canadian economy, which Canada followed with retaliatory tariffs of its own.

Hockey fans were already anticipating what is the marquee matchup of the "4 Nations Face-Off," a new international tournament launched by the NHL that features the United States, Canada, Finland and Sweden battling for on-ice supremacy. The tournament is set to be the first time the best players from each country will have participated in an international tournament in nearly a decade.

Trump accused Canada, a close U.S. ally, of being "very abusive of the United States for many years."

"I love the people of Canada. I disagree with the leadership of Canada, and something is going to happen there," Trump told reporters today before he boarded Marine One to head to the White House. "But if they want to play the game, I don't mind. We can play the game all they want."

Trudeau earlier announced retaliatory tariffs on U.S. products in response to Trump's imposing tariffs on Canadian imports.

Trudeau's office said in a news release today that he and Sheinbaum spoke yesterday about "the imposition of U.S. tariffs on both countries, as well as their respective efforts to enhance border security and combat the production and distribution of illegal drugs."

They “agreed to remain in close contact,” the release said.

Trudeau and Sheinbaum also laid out their countries' "deep people-to-people ties, the strong trade and investment relationship between Canada and Mexico, and the importance of preserving North American competitiveness and prosperity."

Both leaders have expressed deep opposition to Trump’s decision to impose tariffs on the two close U.S. allies.

Futures, which indicate where the stock market will open tomorrow morning, dropped as trading began at 6 p.m. ET.

Dow Jones Industrial Average futures slid more than 500 points. The S&P 500 was set for a drop of more than 1.8%, and Nasdaq futures fell by nearly 2.8%.

With China, Mexico and Canada as top U.S. trading partners whose economies are highly intertwined with the United States’, markets are likely to be rattled by aggressive tariffs, such as those Trump signed yesterday. Oil prices also rose, which is likely to stoke concerns among investors about prices at the gas pump.

In a video message today on X, Sheinbaum gave the United States the option to walk back its 25% tariffs on imports from her country and agree to work side by side — or else face retaliatory measures to be announced as soon as tomorrow.

Sheinbaum called the White House’s claims that the Mexican government has ties with criminal groups “irresponsible” and “slanderous,” adding the United States is partly to blame for the fentanyl crisis.

She denounced the government for not taking tougher action on illegal drug sales in U.S. cities and not cracking down on the sale of U.S.-made weapons to Mexican drug cartels.

Secretary of State Marco Rubio met with Panamanian President José Raúl Mulino in Panama over the weekend, State Department spokesperson Tammy Bruce said in a readout of the meeting.

Rubio told Mulino about Trump’s concern regarding Chinese influence over the Panama Canal and said Rubio “made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty,” according to Bruce.

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The Canadian ambassador to the United States, Kirsten Hillman, said today that the Canadian government hopes to avert the imposition of tariffs by Tuesday but that it will stand up for itself if the United States doesn't stand down.

"It’s hard to know what more we can do, but we’re obviously open to any other suggestions that come our way," Hillman said about the possibility of avoiding a trade war with the United States in an interview on ABC News’ “This Week." She said low-level conversations between the two countries have occurred since Trump's announcement yesterday that he's slapping 25% tariffs on imports from Canada.

In the wake of Trump's decision, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs.

"I think the Canadian people are going to expect that our government stands firm and stands up for itself," Hillman told ABC News. She added, "I don’t think we’re not at all in interested in escalating, but I think that there will be a very strong demand on our government to make sure that we, we stand up" for continuing to observe existing free trade agreements.

Hours after Trump signed the orders implementing tariffs, Canada, Mexico and China slammed the move and promised retaliatory measures.

U.S. allies Canada and Mexico said they would implement their own tariffs in response to Trump’s, a move that signals further economic upheaval among the close trading partners. China, a U.S. competitor, did not mention retaliatory tariffs or other specific measures but said it would file a lawsuit with the World Trade Organization and enact “necessary countermeasures.”

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The director of security and the deputy director of security at the U.S. Agency for International Development were placed on administrative leave last night after four Department of Government Efficiency employees accessed USAID offices last week and sought to access its systems, according to three current and former USAID officials.

The security office is essential to managing security clearance investigations and maintaining USAID's relationship with the intelligence community. 

In another major move to curtail USAID’s operation, most of the staff at its legislative and public affairs bureau were also placed on administrative leave last night.

A fourth source told NBC News that several of the agency’s communications staff members also were blocked from access to its internal systems to communicate with staff members last week.

Senate Minority Leader Chuck Schumer today blasted Trump's decision to impose tariffs on China, Mexico and Canada.

"Donald Trump is initiating a 25% increase in tariffs on Mexico and Canada. And what’s that going to mean? Higher prices, higher prices for New Yorkers, higher prices for Americans," Schumer, D-N.Y., told reporters at a news conference.

"So I am saying to President Trump: 'Stop these tariffs. You campaigned on lowering prices. You campaigned on this wallet, but your tariffs will have more money come out of this wallet for so many goods and services, for food, for clothing, for cars,'" he said.

To make his point, Schumer held up a Corona beer, a lime and an avocado, highlighting the fact that Americans tend to drink beer and eat guacamole on Super Bowl Sunday, which is coming up next weekend.

Sen. Eric Schmitt, R-Mo., sidestepped a question about whether Edward Snowden is a traitor to the United States while defending Trump's pick to be the director of national intelligence.

Asked directly whether he considers Snowden a traitor, Schmitt told "Meet the Press" moderator Kristen Welker: "Look, if he's — if he's been indicted, if he ever comes back United States, he's going to have a trial. But this idea of you trying to disqualify people by using these terms is ridiculous."

Senators on both sides of the aisle raised concerns last week about former Rep. Tulsi Gabbard, Trump's nominee to be the next DNI, and her past comments supporting Snowden and calling him a "brave whistleblower."

Trump suggested yesterday on Truth Social that the tariffs against Canada are a move to entice it to join the United States.

"We pay hundreds of Billions of Dollars to SUBSIDIZE Canada. Why? There is no reason. We don’t need anything they have," he wrote.

He added: "Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true! Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada — AND NO TARIFFS!"

Trump defended his tariffs on Truth Social this morning, calling critics the "tariff lobby."

He accused the three countries of having participated in a "decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS."

Still, Trump questioned, in all-capitals: "WILL THERE BE SOME PAIN?"

He then answered his own question, writing: "YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."

Ken Martin, who won yesterday's election to chair the Democratic National Committee, said "working families will" shoulder the cost of Trump's tariffs.

"Here’s the thing about Donald Trump’s erratic tariff policy: Trump isn’t going to make corporate billionaires pay for these tariffs — working families and small businesses will," he said. "He’s using American workers as pawns in his petty political games. If a president promised that they’d help my family get by and then they did this, I’d be pretty pissed off. So you should be pissed off."

Martin succeeds Jaime Harrison, who previously headed the DNC.

United Auto Workers President Shawn Fain, a frequent Trump critic, said yesterday on X that if Trump "is serious" about wanting to increase "good blue collar jobs," he should "immediately seek to renegotiate our broken trade deals."

"The UAW supports aggressive tariff action to protect American manufacturing jobs as a good first step to undoing decades of anti-worker trade policy," he wrote. "We do not support using factory workers as pawns in a fight over immigration or drug policy."