Trump's trade war among allies triggers retaliation from Canada and Mexico

[February 03, 2025]  By ROB GILLIES and FABIOLA SÁNCHEZ

TORONTO (AP) — Canada and Mexico ordered retaliatory tariffs on American goods in response to sweeping tariffs imposed by President Donald Trump, and businesses and consumers in both countries questioned Sunday how the new trade war might affect them.

Canada initially ordered tariffs of 25% on American imports starting Tuesday, including beverages, cosmetics and paper products worth 30 billion Canadian dollars ($20 billion). A second list of goods was to be released soon, including passenger vehicles, trucks, steel and aluminum products, certain fruits and vegetables, beef, pork, dairy products, aerospace products and more. Those goods were estimated to be worth 125 billion Canadian dollars ($85 billion).

“We can play the game all they want,” Trump said. He said he plans to speak with his Canadian and Mexican counterparts on Monday.

Mexico has so far said only that it will impose retaliatory tariffs, without mentioning any rate or products.

Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum spoke by phone Saturday after Trump's administration imposed the new tariffs — 25% on goods from Canada and Mexico, with a lower rate of 10% for Canadian oil, and 10% on imports from China.

Trudeau's office said in a statement that Canada and Mexico agreed “to enhance the strong bilateral relations" between their countries. Canadian officials have had extensive dialogue with their Mexican counterparts, but a senior Canadian official said he would not go as far as to say the tariff responses were coordinated.

“Now is the time to chose products made right here in Canada,” Trudeau posted Sunday on X. “Check the labels. Let’s do our part. Wherever we can, choose Canada."

Canada is the largest export market for 36 states, and Mexico is the largest trading partner of the U.S.

Canada and Mexico ordered the tariffs despite Trump’s further threat to increase the duties charged if retaliatory levies are placed on American goods.

“We’re certainly not looking to escalate, but we will stand up for Canada," Trudeau said late Saturday.

Some authorities in the provinces of Ontario, British Columbia, Quebec, Manitoba and Nova Scotia planned to remove American liquor brands from government store shelves.

For instance, the Liquor Control Board of Ontario sells nearly $1 billion worth of American wine, beer, spirits and seltzers every year, Ontario Premier Doug Ford pointed out Sunday.

“Not anymore,” Ford said in a statement. Starting Tuesday, they planned to remove American products from their shelves and their catalog. As the only alcohol wholesaler in the province, the board's action will prevent Ontario-based restaurants and retailers from ordering or restocking U.S. products.

On social media, people were sharing suggestions for alternatives to American products.

Trudeau addressed Americans directly, saying they the tariffs “will have real consequences for you.”

Trump responded Sunday, criticizing Canada’s trade surplus with the United States and contending that without that surplus, “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!”

Canadian Prime Minister Justin Trudeau addresses media members after U.S. President Donald Trump signed an order to impose stiff tariffs on imports from Mexico, Canada and China, in Ottawa, Canada, Saturday, Feb. 1, 2025. (Justin Tang/The Canadian Press via AP)

Canadians are feeling a sense of betrayal. Trudeau reminded Americans that Canadian troops fought alongside them in Afghanistan and helped respond to many disasters in the U.S., including wildfires in California and Hurricane Katrina.

Canadian hockey fans booed the American national anthem Saturday at two National Hockey League games. The booing continued Sunday at an NBA game in Toronto where the Raptors played the Los Angeles Clippers.

One fan at the Raptors game chose to sit during the anthem while wearing a Canada hat. Joseph Chua, who works as an importer, said he expects to feel the tariffs "pretty directly.”

“I’ve always stood during both anthems. I’ve taken my hat off to show respect to the American national anthem, but today we’re feeling a little bitter about things,” he said, adding that he will start to avoid buying American products.

In Mexico, public statements on the tariff threat have been limited to saying the government is prepared and that it will ensure the country is respected.

In 2019, Mexico avoided Trump’s tariff threat by adding immigration control to the responsibilities of its newly formed National Guard, but this time the accusation that Sheinbaum’s administration has alliances with criminal groups pushed her to punch back.

She called on the U.S. to clean up its own problems with drugs and guns and to keep its nose out of Mexico. Trump said he was imposing the tariffs to stop the flow of illegal immigrants and drugs across both the southern and northern U.S. borders.

In the streets, Mexicans were trying to absorb the announcement.

From a small coffee and snack shop in downtown, Carlos Barona, 40-year-old salesperson, said that Trump’s decision did not worry him and that he trusts in the actions of Sheinbaum’s administration.

“If we survived the pandemic and everything that it brought to us, I think we will survive this,” he said.

In the border city of Mexicali, across from Calexico, California, some people were concerned about the wider implications of a trade war.

Driver Alejandro Acosta says that he crosses the border weekly in his truck to deliver vegetables to American companies. He said he fears American businesses in the Mexicali Valley will no longer want to operate in Mexico and they will move to the U.S.

“If they raise taxes on the factories here, jobs may also decrease,” he said.

The trade war comes as Canada begins an election cycle. Trudeau's Liberal Party will announce a new leader on March 9, and a spring election is expected.

“Canada will not bow down to a bully," said Mark Carney, considered the front-runner to replace Trudeau.

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Sánchez reported from Mexico City. Associated Press writers Maria Verza and Megan Janetsky in Mexico City and Ian Harrison in Toronto also contributed to this report.

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