A furious Trudeau accused Trump of trying to cause the collapse of Canada's economy to make it easier for the United States to annex his country, and blasted Washington for targeting a close ally while "appeasing" Russia over Ukraine.
Fears that the tariff spat is rapidly devolving into the most brutal trade war of modern times sent global markets lower, with the S&P 500 -- a major Wall Street index -- extending recent losses to erase all of its gains since Trump's US election victory in November.
Trump had announced -- and then paused -- blanket 25 percent tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to stop illegal immigration and drug trafficking.
But he pushed ahead with them Tuesday, citing a lack of progress on both fronts. And after Canada retaliated, Trump quickly threatened to hit it again, mocking Trudeau's position as the country's premier.
"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" he wrote in a post on his Truth Social platform, referring to the Canadian leader with the title used for heads of US states.
The sweeping duties will hit US imports from both US neighbors, affecting everything from avocados to the lumber crucial for building US homes, and hampering supply chains for key sectors like automobiles.
Trump also inked an order Monday to increase a previously imposed 10 percent tariff on China to 20 percent -- piling atop existing levies on various Chinese goods.
Beijing condemned the "unilateral imposition of tariffs by the US," filing a complaint with the World Trade Organization and threatening to impose 10 and 15 percent levies on a range of agricultural imports from the United States.
- Pushing up prices -
Analysts and businesses have warned that the higher import costs could push up prices for consumers -- which could complicate efforts to bring down inflation, one of the issues that got Trump elected.
That includes at grocery stores -- Mexico supplied 63 percent of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.
Brian Cornell, the chief executive of the US retail giant Target, said Tuesday that the company could be forced to raise the cost of some fruits and vegetables over the next couple of days.
"If there's a 25 percent tariff, those prices will go up," he told CNBC.
"The giant wildcard here, obviously, is how the consumers are going to react to the price increases," Matthew Bilunas, the chief financial officer at US electronics retailer Best Buy, told investors during a conference call on Tuesday.
Housing costs could also be hit. More than 70 percent of imports of two key materials homebuilders need -- softwood lumber and gypsum -- come from Canada and Mexico, according to the National Association of Home Builders.
Truck drivers at the Otay Mesa border crossing in Mexico told AFP they were already feeling the impact as they waited to cross into the United States early Tuesday.
- Fight to 'the bitter end' -
Ottawa's retaliatory 25 percent tariffs on $30 billion of goods went into effect early Tuesday, and Trudeau said that they would expand to "the remaining $125 billion of American products in 21 days time."
"Canadians are reasonable. We are polite. We will not back down from a fight," he said.
Addressing the US president directly, Trudeau said that while he thinks Trump is a "smart guy," the tariffs are a "very dumb thing to do."
China said its tariffs against the United States will come into effect next week and will impact tens of billions of dollars in imports, from soybeans to chickens.
Beijing also announced that imports of US lumber have been suspended, and that soybean shipments from three American exporters have been halted, as country's foreign ministry vowed to fight the US trade war to the "bitter end."
China files complaint with WTO against US tariffs
Beijing (AFP) Mar 4, 2025 -
Beijing said Tuesday it had filed a complaint with the World Trade Organization against the United States over President Donald Trump's tariff increases on Chinese goods.
The statement comes a day after Trump ordered additional tariffs against Chinese goods, increasing previously imposed 10 percent levies to 20 percent.
"The United States' unilateral tax measures seriously violate WTO rules and undermine the foundation of China-US economic and trade cooperation," Beijing's commerce ministry said in a statement, adding that it was "strongly dissatisfied and firmly opposed" to the tariffs.
In response to the US tariffs, Beijing has imposed new duties on a range of agricultural imports from the United States.
The additional 15 percent tariffs on products including chicken, wheat, corn and cotton are due to come into effect next week.
"China will, in accordance with WTO rules, firmly safeguard its legitimate rights and interests and defend... the international economic and trade order," the commerce ministry statement added.
A WTO official confirmed to AFP that the new complaint from China had been received.
Trump, in imposing the tariffs, said China had not done enough to halt the trafficking of fentanyl and other highly potent opioids that kill thousands of Americans each year.
Analysts say that stemming the flow of deadly drugs is just one aim for Trump, who also frequently mentions trade imbalances when discussing the tariffs.
In a white paper released Tuesday, China's National Narcotics Control Commission touted actions already taken to crack down on trafficking of fentanyl-related substances, state media reported.
"Since implementing full control of fentanyl-related substances, China has not detected any further cases of smuggling or selling fentanyl-related substances abroad," Xinhua reported, attributing the matter to a senior commission official.
China is a major market for US energy exports and according to Beijing customs data, imports of oil, coal and LNG totalled more than $7 billion last year.
Beijing launched a similar dispute in February when Trump first threatened the tariffs, describing the levies as "malicious" at the time.
It says it will also probe US tech giant Google and the American fashion group which owns Tommy Hilfiger and Calvin Klein.
Trump has made tariffs a key foreign policy tool of his second term, joking that the word tariff is the "most beautiful" in the dictionary.
The Republican has also imposed tariffs on Mexico and Canada which he says are punishment for failing to halt the flow of migrants and drugs into the United States.
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