After Trump draws first blood, Canada, Mexico retaliate with counter tariffs

President Donald Trump on Saturday moved to impose stiff tariffs on Mexico and Canada, whose leaders swiftly responded with their own levies and accused Trump of starting a trade war that would debilitate all three economies.

Trump hit Canada and Mexico with tariffs of 25 per cent on all goods, with a partial carve out for Canadian energy and oil exports. He said he was imposing them until the flow of migrants and illegal fentanyl into the United States was alleviated, but his administration did little to explain what further steps were needed to remove the tariffs.

The tariffs announced Saturday also placed a 10 per cent tariff on goods from China, another major US trading partner. China's Ministry of Commerce issued a statement saying that China will file a legal case against the US at the World Trade Organization.

The ministry also said China "will take corresponding countermeasures to firmly safeguard its rights and interests." But it did not mention tariffs or otherwise specify what kind of countermeasures it might take. China has strong incentives to avoid a trade war, but also risks looking weak domestically if it does not retaliate.

The responses from Mexico and Canada to the levies -- set to go into effect Tuesday -- were swift.

Prime Minister Justin Trudeau of Canada later said that Canada planned to initially retaliate with 25 per cent tariffs on approximately $20 billion worth of US goods on Tuesday, and $85 billion more within three weeks.

Trudeau made a direct, emotional plea to Americans that evoked the countries' close ties and shared history, including Canadian soldiers who fought and died beside American counterparts. He also said that the best way to usher in a golden age for the United States was to partner with Canada, and that Canada has critical minerals and other ingredients that American industry needs to succeed.

"We don't want to be here," he said of the tariffs. "We didn't ask for this."

President Claudia Sheinbaum of Mexico responded with a statement on social media that pushed back on Trump's criticism. She described US suggestions that her government collaborates with drug traffickers as "slander." She also called on the US to curb its domestic demand for drugs, and proposed more bilateral collaboration on the issue.

Sheinbaum added that Mexico would implement "tariff and nontariff measures in defense of Mexico's interests." But she did not elaborate, and the potential scope of Mexico's retaliation was not immediately clear.

Here's what else to know:

-- Major partners: Products from Mexico, China and Canada accounted for more than 40 per cent of all goods that come into the United States. The three countries provide cars, medicine, shoes, timber, electronics, steel and many other products to American consumers. Trump and other White House officials have deflected criticism that the tariffs will add to inflation.

-- Canada's plans: Before Trudeau's prime-time address, Canada had indicated that it would tax Florida orange juice, Tennessee whiskey and Kentucky peanut butter -- products from states with Republican senators. Trudeau said Saturday night that Canada's tariff list would also include products like beer, wine, vegetables, perfume, clothing, shoes, household appliances, furniture and sports equipment, and materials like lumber and plastics.