President Trump on Saturday declared steep tariffs on all imported goods from Canada, Mexico, and China, setting the stage for a trade war with the U.S.'s largest trading partners. Trump set the tariffs at 25% on Canada and Mexico, with a 10% carve-out for Canada's oil and energy exports, and a 10% tariff on all goods from China.
Though the tariffs were initially set to go into effect on Saturday, Feb. 1, the implementation was delayed to Tuesday, Feb 4, at 12:01 am. The tariffs will be imposed on top of any existing tariffs, and have been implemented in response to the flow of illegal drugs into the United States, according to the White House.
"The government of Mexico has afforded safe havens for the cartels to engage in the manufacturing and transportation of dangerous narcotics, which collectively have led to the overdose deaths of hundreds of thousands of American victims," a White House fact sheet states.
Mexico's President Claudia Sheinbaum was the first to announce retaliatory tariffs and non-tariff measures in response, in a post on X Saturday evening. In the post, Sheinbaum proposed that the U.S. and Mexico establish a working group to combat criminal organizations, warned against using tariffs to solve problems, and forcefully denounced the White House's accusation that the Mexican government has alliances with drug cartels.
"I instruct the Secretary of Economy to implement Plan B that we have been working on, which includes tariff and non-tariff measures in defense of Mexico's interests," a translation of Sheinbaum's post reads.
The Canadian government is also reportedly considering levying counter-tariffs on American goods in response. Canadian Prime Minister Justin Trudeau said he would announce more details to the Canadian people in an address on Saturday night.
The Canadian government's response may include export tariffs on energy, Bloomberg reported Saturday, setting the stage for a critical trade war between the U.S. and its largest foreign energy supplier. The price of energy factors heavily into the cost of mining Bitcoin in the U.S., which has an estimated 36% share of the global hashrate, according to mining firm Luxor.
The Block's GMCI 30 index of the top 30 crypto tokens by market cap is down about 4% over the past 24 hours as the market responds to Trump's executive order.
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