Parts of the US, including the Pacific Northwest and Northeast US, are deeply reliant on electricity or gas flows from Canada. Under an energy emergency Trump declared his first day in office, refined gasoline and diesel, uranium, coal, biofuels and critical minerals were all given the lower 10% tariff.
Oil industry advocates, however, have warned against even a 10% increase in the cost of crude inputs into Midwestern refineries that have few near-term options to substitute with US supplies.
Democrats wasted no time in pouncing on messaging around how the trade moves could impact families’ budgets. “These tariffs will be devastating for American consumers,” Congressman Greg Stanton, an Arizona Democrat, and some 40 colleagues wrote in a Saturday letter.
“Trump’s tariffs on Mexico and Canada will make your life more expensive,” Stanton said more bluntly in a separate post on X.
Retaliatory Steps
Mexico was strident in rejecting the Trump administration’s allegation that it had alliances with drug traffickers, and suggested the US government curb demand and use of narcotics internally.
“Drug use and distribution is in your country and that is a public health problem that you have not addressed,” Mexican President Sheinbaum said in a post on X. “It is not by imposing tariffs that problems are resolved, but by talking.”
Mexico will also implement non-tariff measures, while calling for cooperation with the US on topics including security and addressing the fentanyl public health crisis, she said.
The Mexican economy could enter a “severe recession” if Trump’s tariffs remain in place for more than a quarter, according to Gabriela Siller, director of economic analysis at Grupo Financiero Base. “If the tariffs last several months, the Mexican peso depreciation could reach record highs.”
Canada’s Trudeau said American beer, wine, food and appliances will be among the many items subject to Canadian tariffs, and his country is also considering measures related to critical minerals. He encouraged Canadians to buy locally made products and skip US vacations.
The orders enacting the tariffs do create a process to remove them. Homeland Security Secretary Kristi Noem can inform Trump if the countries have taken adequate steps to alleviate concerns over migration and drugs, and the tariffs are removed if he agrees.
It’s not clear how realistic a prospect that is. Canada, for instance, already took steps to tighten its border to appease Trump, and it didn’t deter him.
In a speech Saturday night, Trudeau invoked Canada’s long history of partnership with the US. “We have fought and died alongside you,” he said, citing World War II, the Korean War and the recent war in Afghanistan.
Beginning of Talks
“Together, we’ve built the most successful economic, military, and security partnership the world has ever seen,” Trudeau said, urging Trump to partner with Canada on their shared challenges.
Although the European Union wasn’t among the targets of Trump’s executive actions on trade over the weekend, he’s often complained about what he sees as unfair treatment of American exports such as cars sold in Europe.
On Sunday, German Finance Minister Joerg Kukies cautioned against over-reacting.
“One should not react in panic to the first decision, but rather see it as the beginning of negotiations, not the end,” Kukies told German business representatives in Riyadh at the start of a trip aimed at improving trade ties in the Middle East.