Donald Trump says Americans could feel 'pain' thanks to tariffs on Mexico, Canada and China

U.S. President Donald Trump stated that the tariffs he imposed on Mexico, Canada, and China could cause "some pain" for the American people. Meanwhile, Wall Street and America's largest trading partners have expressed hope that this trade war will not last long. Trump defended his newly announced tariff policies on Sunday.

Canada and Mexico immediately vowed to retaliate after President Trump issued the executive orders on Saturday. These countries stated that they are working together to counter the 25% tariffs imposed by the U.S. on imported goods. This move will shock the economic integration that has been formed by the free trade agreement among the three North American countries for decades. China stated that it will challenge Trump's 10% tariffs at the World Trade Organization and take unspecified countermeasures.

Critics argue that the actions against the U.S.'s three largest trading partners will harm the American people by raising prices and slowing global economic growth. "The U.S. has a huge trade deficit with Canada, Mexico, and China (and almost every country), and owes $36 trillion, we can’t be the ‘stupid country’ anymore," the Republican president wrote on social media. Trump added in capital letters, "This will be the golden age of the U.S.! Will there be some pain? Yes, maybe (maybe not!)."

Trump did not specify what he meant by "some pain." A model by Ernst & Young's chief economist Greg Daco suggests that Trump's tariff plan would reduce U.S. economic growth by 1.5 percentage points this year, push Canada and Mexico into recession, and cause "stagflation" in the U.S.—high inflation, economic stagnation, and rising unemployment. Markets are anxiously awaiting developments, but some analysts say there is some hope for negotiations, particularly with Canada and China.

“With only two days until implementation, the tariffs seem likely to take effect, though a last-minute compromise cannot be completely ruled out,” Goldman Sachs economists said in a report on Sunday. They added that the tariffs are likely to be temporary, given the very broad conditions the White House has set for their removal, "but the outlook is unclear." Trump’s tariff policies, outlined in three executive orders, are scheduled to take effect at 12:01 a.m. on Tuesday. Trump vowed to maintain the tariffs until what he calls a national emergency regarding fentanyl, a deadly opioid, and illegal immigration, is resolved.

U.S. Secretary of State Marco Rubio made his first visit to Panama and other Latin American countries, aiming to counter China's influence in the region. China has opened the door for negotiations with the U.S., but responded strongly on the fentanyl issue. "Fentanyl is an American problem," the Chinese Foreign Ministry stated, adding that China has taken extensive measures to address it. Canada's ambassador to the U.S., Kirsten Hillman, said on Sunday that she hopes an agreement can be reached. "We hope they won't go into effect on Tuesday," Hillman said.

Trump has been particularly dismissive of Canada, calling for the country to become the 51st U.S. state and stating that Canada "would no longer exist as a viable country" without its "huge subsidies." The tariff announcement fulfilled threats Trump made repeatedly during his 2024 presidential campaign and since taking office, ignoring warnings from top economists that a new trade war with the country’s major trading partners would erode U.S. and global economic growth while raising prices for consumers and companies.

Trump declared a national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to support the tariff policies. These laws grant the president broad powers to impose sanctions in response to a crisis. Trade lawyers say Trump is again testing the limits of U.S. law and that the tariffs are likely to face legal challenges. "Who's going to get hurt the most? The American consumer—they're going to see skyrocketing prices on everything from groceries to gasoline to cars," said U.S. Representative Josh Gottheimer.

Canadian Prime Minister Justin Trudeau sent a message to the American people, saying that U.S. citizens will be harmed by rising grocery and gas prices, as well as potential closures of auto assembly plants and restricted supplies of metal minerals. Trudeau urged Canadians to boycott the U.S. and its goods. The Canadian leader said late Saturday that his country would impose 25% tariffs on $155 billion worth of U.S. goods, including beer, wine, lumber, and appliances, with $30 billion taking effect on Tuesday and $125 billion in 21 days.

Mexican President Claudia Sheinbaum said on Saturday that she had also ordered retaliatory tariffs on U.S. exports. "I have instructed my economy minister to implement the Plan B we have been developing, which includes tariff and non-tariff measures, to defend Mexico's interests," Sheinbaum said, without specifying which U.S. goods her government would target. Cross-border trade between the two neighbors has grown for decades, including a highly integrated auto industry and a large two-way flow of crude oil, natural gas, and motor fuels.

U.S. Census Bureau data shows that U.S. exports to Mexico exceeded $322 billion in 2023, while the U.S. imported more than $475 billion worth of goods from Mexico. Agricultural trade is also booming. Mexico ships vast quantities of fresh produce north, including avocados and tomatoes, while U.S. farmers supply Mexican buyers with large amounts of corn and other grains. A White House fact sheet said the tariffs would remain in effect "until the crisis is alleviated," but did not detail what steps the three countries would need to take to get relief.

U.S. officials say Canada and Mexico have become conduits for fentanyl and its precursor chemicals to flow into the U.S. via small packages that often go unchecked by customs officers.