President Donald Trump has signed an order imposing steep tariffs on imports from Canada, Mexico and China, risking a trade war and increased prices for American consumers.
Mr Trump has declared an economic emergency in order to place duties of 25% on goods from Mexico and Canada, and 10% on all imports from China.
But energy imported from Canada, including oil, natural gas and electricity, would be taxed at a rate of 10%.
The tariffs, set to go into effect on Tuesday, also include a mechanism to escalate the rates if the countries retaliate – which they may be prepared to do.
Mexico and Canada are two of America’s largest trading partners, with the tariffs upending decades-old trade relationships.
Mr Trump said on social media that the tariffs – a longstanding campaign promise – were necessary “to protect Americans”.
The administration also said that the tariffs aimed to stop the spread and manufacturing of the opioid fentanyl, as well as pressuring America’s neighbours to limit illegal immigration to the country.
But the taxes may throw the global economy into turmoil, and significantly worsen inflation in the US – which has already increased the prices of groceries, fuel, housing, cars and other goods.
Mexico’s president Claudia Sheinbaum said at an event on Saturday: “I’m calm, I’ve been saying since yesterday, because I know that Mexico’s economy is very powerful, very strong.”
The country’s economic minister Marcelo Ebrard said “we will win” when asked if he had a message about the US tariffs.
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Meanwhile, Canada’s outgoing prime minister Justin Trudeau said in a post on X that he “did not want this but Canada is prepared”. He will address the country in the coming hours, and will also speak with Ms Sheinbaum.
A new analysis by the Budget Lab at Yale University found that the average US household would lose the equivalent of $1,170 (£944) in income from the tariffs. The research also found that economic growth would slow and inflation would worsen – especially if Canada, Mexico and China retaliate.
Read more:
How Trump’s tariffs could impact consumers
Why is Trump imposing the tariffs?
“It doesn’t make much economic sense,” said William Reinsch, senior adviser at the Centre for Strategic and International Studies and a former US trade official.
“Historically, most of our tariffs on raw materials have been low because we want to get cheaper materials so our manufacturers will be competitive… Now, what’s he talking about? He’s talking about tariffs on raw materials. I don’t get the economics of it.”
Mr Trump appears to be preparing more import taxes.
On Friday, he suggested imported computer chips, steel, oil and natural gas, as well as copper, pharmaceutical drugs and imports from the European Union may be subject to tariffs, which could pit the US against much of the global economy.