Canada, Mexico retaliate after Trump locks in trade tariffs: 'Have plan B, C, D'

Canada and Mexico have announced retaliatory measures against the United States after President Donald Trump confirmed that his administration would impose sweeping tariffs on their exports starting Tuesday. The move has marked a sharp escalation in trade tensions across North America.

Canadian Prime Minister Justin Trudeau condemned Trump's decision, calling it 'unjustified' and vowed that Canada would not let the tariffs go unanswered. On Monday, Trudeau unveiled a package of counter-tariffs mirroring the retaliation plan he had first introduced in February when Trump signed an executive order imposing broad tariffs.

"The first stage will see 25 per cent tariffs placed on approximately Canadian USD 30 billion (USD 20.6 billion) worth of goods from US exporters. These measures will take effect at 12:01 a.m. New York time unless the US reverses its decision," Trudeau said.

In a further escalation, Trudeau confirmed that a second round of tariffs — also set at 25 per cent — would be imposed on Canadian USD 125 billion worth of American products in three weeks. The next wave of tariffs would target key sectors, including automobiles, steel, and aluminum.

"Our tariffs will remain in place until the US withdraws its trade action," Trudeau adding, "Should US tariffs persist, we are actively discussing additional non-tariff measures with provinces and territories".

Meanwhile, Mexican President Claudia Sheinbaum adopted a more measured stance, indicating that the country would wait to see whether Trump followed through with his threat before fully unveiling its response.

Speaking at a morning press conference Monday, Sheinbaum assured that Mexico had backup plans in place should the tariffs take effect.

"We have a plan B, C, D," Sheinbaum said, without divulging specifics. She reaffirmed Mexico's preparedness to respond to any trade actions from Washington.

Mexican officials recently met with their US counterparts in Washington in an attempt to negotiate trade and security policies and avert the impending tariffs. Sheinbaum described the discussions as 'cordial' and noted that coordination between the two countries had been "very good so far".

Donald Trump, speaking from the Roosevelt Room on Monday, reiterated that the tariffs — set at 25 per cent on imports from both Canada and Mexico — would go into effect Tuesday. He justified the measures as necessary to curb the flow of synthetic drugs like fentanyl into the US and to stem illegal immigration.

"Tomorrow — tariffs 25 per cent on Canada and 25 per cent on Mexico. And that'll start. They're going to have to have a tariff," Trump declared.

While Trump has primarily framed the tariffs as tools to enforce border security and anti-drug efforts, he has also pointed to broader economic goals. The US President has signalled his intent to eliminate trade imbalances with Canada and Mexico, aiming to bring more manufacturing jobs back to the US.

The announcement sent ripples through financial markets, with the S&P 500 index dropping 2 per cent in afternoon trading on Monday. Economists have raised concerns that the tariffs could push inflation higher and disrupt supply chains, further straining North American trade relations.