Trump Trade War: How China, Canada, Mexico Are Planning To Retaliate Against Tariffs

There seems to be no stopping President Donald Trump from imposing more tariffs on Canada and Mexico, despite long-standing trade ties with both nations.

"No room left for Mexico or for Canada," he said Monday in response to questions on whether new tariffs on Canadian and Mexican goods will be in place Tuesday, triggering a plunge in the Dow Jones Industrial Average, Nasdaq, and S&P 500.

Aside from tariffs on Canadian and Mexican imports, Trump has also gone hard on China, slapping an additional 10% tariff on certain Chinese goods last month, a move that drew sharp criticism from Beijing.

With the Trump trade war 2.0 in full swing -- especially after he ordered a study into establishing reciprocal tariffs -- affected countries are left with little choice but to threaten countermeasures.

Beijing blasts Trump's alleged use of "fentanyl issue" in trade clash

The Chinese government was quick to criticize Trump since the additional tariffs were announced as soon as he took office for the second time. On Tuesday, Chinese foreign ministry spokesperson Lin Jian reiterated that the country will fight back if necessary.

Lin said the Trump administration was using "the fentanyl issue as a pretext to threaten China with tariff hikes on its imports."

The House Select Committee on China revealed in a 2024 report that the country was directly subsidizing production of illicit fentanyl precursors for sale overseas, helping drive the opioid crisis in the U.S.

For China, the fentanyl issue isn't really related to the trade war, with Lin reiterating that tying the matter to tariffs was wrong.

"China opposes this move and will do what is necessary to firmly safeguard its legitimate interests," Lin warned, indicating Beijing will be prepared to hit the U.S. with more tariffs if pushed to the limit.

China has done this in the past, and it is not new to retaliatory tariffs on American goods. It has even continued to challenge the U.S. in the tech arms race.

Canada puts its foot down on "unjustified" tariffs

Following Trump's Tuesday remarks that the U.S. will impose 25% tariffs on Canadian goods and another 10% on Canadian energy, Prime Minister Justin Trudeau came out with a firm statement.

"Canada will not let this unjustified decision go unanswered. Should American tariffs come into effect tonight, Canada will, effective 12:01 a.m. EST tomorrow, respond with 25% tariffs against $155 billion of American goods," he said.

He went on to note that the tariffs will be in place until the Trump government withdraws the levies on Canadian products and energy.

Trudeau also reminded Trump that it was him who successfully negotiated a trade agreement with Canada during his first term, a deal that has effectively been broken due to his tariffs on Canadian goods.

Mexico is ready for any tariff action

On Monday, Mexican President Claudia Sheinbaum said her country was ready should Trump push through with the tariffs.

She said the government has a "plan B, C, D," though she didn't go into full details, noting that her administration will wait and see how Trump moves before it takes any action.

On the other hand, Sheinbaum was more stern and detailed Sunday, when she delivered a powerful speech that drew claps from the audience in Colima during the delivery of welfare programs for the municipality.

"I have said it other times: the United States would not be what it is, if it were not for the Mexicans who work on the other side, if there were no countrymen working in the fields on the other side, the best workers in the fields, there would be no food on the table of Americans," she said, as per a Google translation.

Unlike Canada, which has a clear plan on retaliation, Mexico may be planning to keep its retaliatory actions under wraps until the last minute.

Still, the latest statements from China, Canada, and Mexico indicate that they refuse to go down without a fight in the trade war.

The tariffs may hurt them more than the world's largest economy, but collectively, retaliatory tariffs from three of the U.S.'s top trading partners will also have an impact on the American economy.