2025–2026 United States trade war with Canada and Mexico

U.S.–Canada trade The bilateral trade relationship between the United States and Canada is one of the world's largest. Canada–U.S. trade comprises about one third of Canada's economy, and about 3 percent of the United States's economy. In the first nine months of 2024, Canadian government data estimated that () of goods crossed the Canada–U.S. border. More than 70 percent of Canadian exports go to the United States. The countries' energy and automotive markets are both highly integrated, As of November 2024, the U.S. government estimated the United States's trade deficit with Canada to be . and Canada is the largest supplier of U.S. energy imports and second-largest recipient of U.S. energy exports. U.S.–Mexico trade The economies of the United States and Mexico are highly intertwined. In 2024, roughly of goods were transported across the Mexico–U.S. border, and over in commerce between the two countries occurs daily. More than 75 percent of Mexico's exports go to the United States, Roughly 70 percent of Mexico's natural gas consumption comes from the U.S., and the U.S. imports about 700,000 barrels of crude oil from Mexico each day. In the U.S., it caused offshoring as U.S. companies relocated their businesses to Mexico for cheaper labor, harming American factory towns and workers. The backlash against free trade allowed candidates like Donald Trump, who supported protectionist policies, to rise to prominence in U.S. politics. However, many parts of the U.S. benefited from NAFTA's increased trade and economic activity. Changes between NAFTA and the USMCA were largely cosmetic; the new agreement maintained zero tariffs on most products traded across the three countries, but allowed some tariffs to be imposed for national security matters. The region covered by USMCA is one of the world's largest free trade zones. ==Political background==

First Trump administration During his first term, Trump threatened tariffs on Mexico if it did not end illegal immigration to the United States across the U.S.–Mexico border and repeatedly threatened to withdraw from NAFTA. Trump pressured Canada and Mexico to renegotiate NAFTA by threatening aggressive import tariffs, and in May 2018, he extended the U.S.'s global tariffs on steel and aluminum to the two countries, inviting them both to retaliate. The three countries agreed to lift the steel and aluminum tariffs in May 2019, one year after they had begun, prior to the USMCA taking effect on July1, 2020. One month after the USMCA entered force, Trump said that aluminum imports constituted a national security threat that endangered U.S. producers and imposed 10 percent tariffs on Canadian aluminum. In 2018 and 2019, Trump also placed major tariffs on China, totaling about of tariffs on about of products, which were largely kept in place by the subsequent administration of Joe Biden. Canadian politics Trump's 2024 presidential campaign outlined an economic strategy that emphasized the use of tariffs to fund proposed tax cuts and encourage domestic manufacturing in the United States. In November 2024, after winning the U.S. presidential election, Trump threatened 25 percent tariffs on all products from Canada and Mexico, which he said would "remain in effect until such time as drugs, in particular fentanyl, and all illegal aliens stop this invasion of our country." Shortly after, Canadian prime minister Justin Trudeau—who has a contentious relationship with Trump—traveled to Trump's estate in Florida to speak with him and discuss the tariffs, as well as illegal immigration and drug smuggling across the Canada–U.S. border. On December16, Canada announced a plan to spend () on border security to alleviate Trump's concerns. The plan included the creation of a joint U.S.–Canada "strike force" intended to combat transnational crime. On January 6, 2025, Trudeau declared his intention to resign as Liberal Party leader and prime minister after the election of a new leader on March 9. Doug Ford, the premier of Ontario and head of the Council of the Federation, called a snap provincial election to be held on February 27, saying that he wanted his Progressive Conservative Party of Ontario to have a stronger mandate to oppose Trump's impending tariffs on Canada. Opioids, predominantly fentanyl, have killed over 500,000 Americans since 2012. Second Trump administration During his inaugural address on January 20, 2025, at the beginning of his second term, Trump said he would enact steep tariffs on other countries. He said that "Instead of taxing our citizens to enrich other countries", the U.S. would "tariff and tax foreign countries to enrich our citizens". Trump launched a process to designate Mexican drug cartels and other criminal organizations as foreign terrorist organizations. Trump also said both countries were unfairly profiting from the United States's trade deficits. On January 29, Sheinbaum said of Trump's threatened tariffs that "We don't think its going to happen really", and that "if it happens, we also have our [retaliation] plan", which she declined to detail. and said that while he would not use military coercion, he could use "economic force" to bring about Canadian annexation. Since the trade war began, Trudeau has said that Trump's comments should be taken as a serious threat against Canadian sovereignty and that Trump seeks to control Canada to access its mineral resources. In an interview, Trump said that his suggestions to annex Canada were serious, and argued that the U.S. trade deficit with Canada was "essentially a subsidy" and that Canada would be "much better off" in the United States. Trump has argued that Canadian statehood would make tariffs "totally disappear", lower Canadian taxes, and make the country more secure militarily, and called the Canada–U.S. border an "artificial line that looks like it was done with a ruler". Trudeau has said that Canadian annexation is "never going to happen". ==Initial tariff threats==

on the day of his second inauguration in 2025|alt=Photograph of a man On February 1, 2025, Trump signed three executive orders imposing 25 percent tariffs on all goods from Mexico and Canada The orders were issued under the International Emergency Economic Powers Act (IEEPA) and were set to take effect at 12:01 a.m. Eastern Standard Time on February 4. marking the first time the law was used to impose tariffs. In the executive order, he said that Canada has played a "central role" in allowing fentanyl to enter the U.S. and that it has failed to "devote sufficient attention and resources or meaningfully coordinate" with the U.S. to "stem the tide of illicit drugs," despite the vast majority of fentanyl in the U.S. coming from the southern border with Mexico. According to Bloomberg News, Trump advisors Peter Navarro and Stephen Miller were the leading officials in the economic discussions regarding the imposition of tariffs. At the same time, China was included at the urging of the National Security Council. In a post on Truth Social, Trump said: "We need to protect Americans, and it is my duty as president to ensure the safety of all. I made a promise on my campaign to stop the flood of illegal aliens and drugs from pouring across our borders, and Americans overwhelmingly voted in favor of it." While he acknowledged that the tariffs could cause "temporary short-term disruption," he said that they needed to be imposed. Trump also claimed that "Tariffs don't cause inflation" but rather that "They cause success." Canada's premiers also responded. Ontario premier Ford said that Canada has "no choice but to hit back and hit back hard" The Premier of Alberta Danielle Smith, who had until then been opposed to aggressive trade action against the United States, said Canada needed to respond to Trump's "mutually destructive policy" and that she supported "the strategic use" of tariffs on U.S. goods "that are more easily purchased from Canada and non-U.S. suppliers". He also directed the Société des alcools du Québec to remove all American products from its shelves. Around Christmas time in 2025, multiple Canadian provinces including Nova Scotia and Manitoba announced they would sell shelved American liquor products being kept in storage with profits going to charitable organizations. No new liquor was purchased for these fundraisers. In Nova Scotia, Premier Tim Houston said the province will double highway tolls for U.S. vehicles and direct the Nova Scotia Liquor Corporation to stop selling all U.S. liquor by February 4. Premier Wab Kinew of Manitoba and Premier Dennis King of Prince Edward Island both said that their provinces would stop importing American liquor, while British Columbia premier David Eby said the BC Liquor Distribution Branch would halt liquor purchases from Republican-led states. On March 10, this was then expanded to ban all U.S. alcohol. Legislation is also planned on being introduced that would tariff U.S. vehicles driving to Alaska through the province. Yukon premier Ranj Pillai said his territory's government would halt orders of U.S. alcohol, review its contracts with U.S. companies, and consider tolls on U.S. vehicles, but later said the measures would be put on hold until tariffs came into effect. Pierre Poilievre, the leader of the opposition Conservative Party, condemned what he called "massive, unjust and unjustified tariffs". He urged that the government end the current prorogation of parliament to retaliate with measures including dollar-for-dollar tariffs on U.S. goods that he said would raise money to help "affected workers and businesses". He also repeated his demand for a "massive" tax cut and other efforts to bolster the economy. After Trump signed executive orders imposing 25 percent tariffs, Sheinbaum said Mexico would implement tariff and non-tariff retaliatory measures against the United States. Sheinbaum also responded to Trump's claim that she has an alliance with the Mexican drug cartels, calling it "slander". At an event on February 1, she said Mexico would keep a "cool head" in proceeding with its retaliations, and she proposed establishing a task force with the U.S. to address Trump's issues with Mexico and said that "problems are not resolved by imposing tariffs". ==One-month delay==

On February 3, 2025, Sheinbaum and Trump mutually agreed to delay the tariffs on Mexico by one month, until March 4. Sheinbaum accepted sending 10,000 troops from the Mexican National Guard to their border to prevent drug trafficking. Trump said the U.S. had pledged to take measures to curb weapons trafficking to Mexico. During their call, Trump complemented Sheinbaum, telling her "You're tough". Sheinbaum's calm demeanor during calls with Trump and success in mitigating illegal immigration and fentanyl appeared to earn the respect of Trump and impressed members of his administration, including Stephen Miller, who is Trump's deputy chief of staff for policy and the U.S. homeland security advisor. The Canadian Bankers Association said that 16 U.S.-based bank subsidiaries and branches with around () in assets are currently operating in Canada. After a second call that afternoon, Trump and Trudeau successfully negotiated a one-month delay on the tariffs. Officials present for the call told The New York Times and the Toronto Star that in addition to concerns over banking, Trump also relayed grievances over Canada's protection of its dairy sector and Canadian consumption taxes that Trump said make American goods more expensive. Trump also said that the 1908 treaty between the United States and the United Kingdom that established the 49th parallel as the border between the U.S. and the dominion of Canada was invalid and that he wanted to revise it. Trump wrote on social media after the call that he was "very pleased with this initial outcome" and the tariffs had been delayed "to see whether or not a final economic deal with Canada can be structured". After the call between Trump and Trudeau on February 3, Howard Lutnick, the incoming U.S. secretary of commerce called Dominic LeBlanc, the Canadian finance minister, who he had been communicating regularly since December 2024. Lutnick said that Trump had realized the U.S.–Canada relationship was governed by a series of agreements that could be quickly abandoned. He said Trump was interested in dissolving arrangements related to sharing and managing the Great Lakes, and reviewing military cooperation between the two countries, including NORAD. the Financial Times reported that some officials in Trump's administration have sought to remove Canada from the alliance. Trump said those tariffs were "the first of many", and that over the next four weeks, he would discuss tariffs on cars, pharmaceuticals, chips, and other goods with his team. In response, Trudeau called the tariffs "unacceptable" and said he hoped talks with the Trump administration would resolve the issue, but that Canada will have a "firm and clear" response if needed. Shares of U.S. steelmakers rose in response to Trump's order, while prices for steel and aluminum rose. ==Imposition of tariffs==

On March 3, Trump said that the tariffs that were delayed from February would take effect as planned on March 4, and that there was "no room left" for Canada or Mexico to negotiate a last-minute deal with the United States to delay them further. Lutnick said that both Canada and Mexico had made progress on improving border security, but that neither had satisfied the U.S.'s demands to halt the flow of fentanyl into the United States. Canada's retaliation began simultaneously: 25 percent tariffs on () of U.S. goods took effect on March 4, and Trudeau affirmed that 25 percent tariffs on an additional () of U.S. goods would take effect 21 days later, on March 25. After the tariffs were imposed on March 4, Trudeau said in a news conference that Trump's "excuse" for the tariffs of fentanyl was "completely bogus" and "completely false", and that Trump was imposing tariffs because he wished for "a total collapse of the Canadian economy" to "make it easier" for the U.S. to annex Canada. The onset of the tariffs led to stock market declines in the U.S., especially for retailers and car manufacturers. Later that day, Trump granted a one-month exception from the tariffs for automakers compliant with USMCA regulations, which represent about 85 percent of passenger vehicles imported to the U.S. from Mexico in 2024. Trump decided after meeting with executives from the three largest U.S. automakers—Ford, General Motors, and Stellantis—who said that the tariffs would harm U.S. companies more than their foreign rivals. After the U.S. tariffs took effect on March 4, Sheinbaum said she would announce Mexico's countermeasures, including retaliatory tariffs, on March 9. She cited plans to speak with Trump in the intervening days as the reason for her delayed response. Sheinbaum said that if the tariffs persisted, Mexico would "reach out to Canada and other nations" and could look for trading partners other than the U.S. or shift trade alliances "if necessary". Sheinbaum began the call by listing to Trump her efforts to secure the Mexico–U.S. border and fight fentanyl trafficking, suggesting to him that the tariffs would make it more difficult for her to justify cooperation with the U.S. to a domestic audience. Although only about 50 percent of U.S. imports from Mexico and 38 percent of U.S. imports from Canada were USMCA-compliant in 2024, many companies had not filed the requisite paperwork because previous tariff levels were so low. The Royal Bank of Canada estimated that almost 90% of Canadian exports entered the U.S. duty free in April 2025, and by August said 100% of Canadian energy exports and 95% of other exports were compliant with the trade pact. • The International Emergency Economic Powers Act (IEEPA) has been used by the US administration to impose tariffs on Canada, Mexico and China for not stopping the smuggling of fentanyl into the US, and to impose "Liberation Day" or "reciprocal" tariffs on most on countries in the world. The US administration claimed IEEPA as the legal authority to impose such tariffs even though IEEPA does not explicitly mention tariffs. Some US importers disputed the administration's interpretation of IEEPA. The president invoked IEEPA on short notice without any preliminary investigation. The administration exempted goods covered under the United States-Mexico-Canada free-trade agreement (USMCA) from IEEPA tariffs. However, in February 2026, the US Supreme Court ruled that a president cannot use IEEPA to impose tariffs. • Section 232 of the U.S. Trade Expansion Act of 1962 allows the US president to impose tariffs on specific foreign industries after an investigation by the Department of Commerce. This has been used to impose tariffs on tariffs on steel, aluminum, and autos, severely affecting these Canadian industries among others. • Section 301 of Trade Act of 1974 allows tariffs on all products of a country following an investigation into unfair trade practices. This section has been used against China. • Section 122 of the Trade Act of 1974 allows tariffs of up to 15 per cent for 150 days, after which Congressional approval is required to extend them. Given that the US Supreme Court ruled against the IEEPA tariffs, the administration could invoke section 122 tariffs and use the 150-day period to conduct investigation under section 301. • Section 338 of the Tariff Act of 1930 allows tariffs of up to 50 per cent in certain circumstances. ==Course of the trade war==

On March 7, Trump threatened reciprocal tariffs on Canadian lumber and dairy products. He said the tariffs would be as high as about 250 percent and take effect the following week. Later, Trump said that Canada "must immediately drop their Anti-American Farmer Tariff of 250 percent to 390 percent on various U.S. dairy products, which has long been considered outrageous." Canada's tariff-rate quota on U.S. dairy products allows a certain amount of U.S. dairy products to enter the country without facing tariffs, with high tariffs only imposed if the imports surpass a certain amount. Since U.S. dairy exports to Canada have never exceeded the quota, the Canadian tariffs have never been activated. The next day, Trump said that Canada would face 50 percent tariffs on steel and aluminum on March 12, rather than the 25 percent tariffs imposed on every other country. In a joint statement, Ford and Lutnick said that U.S. and Canadian officials would meet in Washington, D.C., on March 13 to discuss a "renewed USMCA". As prime minister–designate, he called Trump's threats to impose tariffs on dairy and metals "an attack on Canadian workers, families, and businesses", and that his government would ensure that its response had a "maximum impact in the U.S. and minimal impact here in Canada." He added that tariffs would remain until the U.S. made "credible, reliable commitments to free and fair trade." Trump pledged to impose "reciprocal" tariffs on all countries beginning in April 2. In response, Carney said that "it clear that the United States is no longer a reliable partner", and that while "it is possible that, with comprehensive negotiations, we will be able to restore some trust", "there will be no turning back" in the Canada–U.S. relationship. Carney and Trump spoke directly for the first time in a phone call on March 28. Carney called the call "very cordial" and "substantial", and said that Trump "respected Canada's sovereignty". Trump described his call as "extremely productive" and said that he and Carney "agree on many things". Trump referred to Carney as the "prime minister of Canada", whereas he had addressed Trudeau as the "governor" of Canada as a U.S. state. In addition, Trump said that he believes "things will work out very well between Canada and the United States". Carney told Trump that Canada would respond with retaliatory tariffs if the U.S. tariffs planned for April 2 came into effect. The same day, the U.S. Senate narrowly approved a measure that would revoke some of Trump's tariffs on Canada. Four senators from the Republican Party (Susan Collins, Lisa Murkowski, Rand Paul and Mitch McConnell) joined all senators of the opposition Democratic Party in passing the resolution. However, the measure also needs to pass the Republican-controlled House of Representatives to take effect, in which Republican leaders have much more power to block said measure. Sheinbaum said that Mexico had been given "preferential treatment" by the U.S. and that Canada and Mexico had avoided additional tariffs because of the USMCA. She added that U.S. and Mexican officials had a "mutual respect" relationship. Mexican economy secretary Ebrard said that the worldwide U.S. tariffs could help Mexico by making it cheaper to do business there relative to other countries. Despite Canada's exclusion, Carney denounced the tariffs and said they would "rupture the global economy" and harm economic growth. He also said he would seek to assemble a "coalition of like-minded countries" to create an alternative to the U.S., and that "if the United States no longer wants to lead, Canada will". He declared: "The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. While this is a tragedy, it is also the new reality." Trump announced universal 25 percent tariffs on automobiles and automobile parts on March 27, which came into effect on April 3. On April 11, Trump threatened Mexico with further tariffs and sanctions, saying that it was violating its obligation under the 1944 treaty between the two countries relating to water resources in the Tijuana, Colorado, and Rio Grande rivers. Despite the treaty requiring that Mexico deliver to the United States 1.75 million acre-feet of water every five years, it had offered less than 500,000 from October 2020 to December 2024. Trump accused Mexico of "stealing the water from Texas farmers". Sheinbaum acknowledged that Mexico had failed to fulfill its commitments under the treaty: She said that the 2020–2023 North American drought had prevented Mexico from providing the full amount of water, but that "to the extent of water availability, Mexico has been complying". On April 15, Canada announced several measures to provide relief from tariffs, including a 6-month pause on tariffs for goods imported from the U.S. to be used in "Canadian manufacturing, processing and food and beverage packaging, and for those used to support public health, health care, public safety, and national security objectives." The country also exempted automakers that continue manufacturing in Canada from retaliatory tariffs against the U.S. and began accepting applicants to the "Large Enterprise Tariff Loan Facility" (LETL) program, which supports large Canadian businesses struggling to obtain access to liquidity. Carney had campaigned on a promise to stand up to Trump's threats and protect Canada's economy; after winning, he declared: "Trump is trying to break us so he can own us. That will never happen." in a news conference on May 2, Carney said he and Trump had agreed to travel and meet in Washington, D.C., on May 6. in May 2025 during their May 2025 meeting Carney met Trump at the White House on May 6. Carney characterized the meeting, which was two hours long and included a 75-minute one-on-one meeting between the two leaders, as "very positive", and Trump said it went "very well" with "no tension". When Trump claimed that Canada would be better off as a part of the U.S., Carney told Trump: "As you know from real estate, there are some places that are not for sale," and that "Having met with the owners of Canada over the course of the campaign the last several months, it's not for sale, it won't be for sale ever." Speaking to reporters at the Canadian Embassy in Washington after the meeting, Carney said that during the meeting Canada "began the renegotiation of our trading relationship" with the U.S. and that Trump had committed to negotiate a new Canada–U.S. trade agreement. During their meeting, Trump and Carney also discussed foreign policy issues such as the Russia–Ukraine war, the Middle Eastern crisis, and China. By May 14, 2025, consulting group Oxford Economics estimated that Canada had "effectively suspended almost all of its retaliatory tariffs on U.S. products" following the exemptions implemented a month prior. Minister of Finance François-Philippe Champagne called this a "falsehood", and stated that 70 percent of the tariffs were still in place. On June 4, U.S. steel and aluminum tariffs doubled to 50 percent. Carney said Canada was in intense negotiations with the U.S. but preparing reprisals if they failed. Bea Bruske, president of the Canadian Labour Congress, stated 23,000 steel jobs and another 9,500 aluminum jobs would be impacted within days. At the G7 summit on June 16, the two countries pledged to work on a deal with the next 30 days. In a June 20 press conference, Carney said Canada would increase its counter-tariffs on steel and aluminium products, at the time 25%, on July 21 if talks with the United States stalled. Carney invited Sheinbaum to the G7 summit, though Trump departed the summit early on June 15 to deal with the Twelve-Day War, missing a scheduled meeting between him and Sheinbaum. On June 27, U.S. president Donald Trump announced the suspension of the trade talks with Canada, also announcing new tariffs on goods crossing the Canada–United States border. That was reverted on June 30, when White House economic advisor Kevin Hassett announced the restart of the trade talks with Canada after the country scrapped its digital services tax on Canadian-source revenue received by large technology firms (which mainly affected American companies including Amazon, Meta, and Google). On July 11, Trump announced in a letter sent to Carney that the US would raise the tariffs to 35%, starting August 1. He cited the retaliatory tariffs imposed by Canada against the US as the main reason, as well as the continued flow of fentanyl into the US from Canada and the trade deficit with Canada. The letter also stated that if Canada raised its tariffs against the US, the US would raise its tariffs by that percentage on top of the existing 35%, as well as saying if Canada works with the US to stop the flow of fentanyl, the US may adjust the tariffs upwards or downwards, based on the relationships with Canada. On August 5, the Associated Press reported that due to the USMCA exemption, as of August 2025, over 85% of Canada-U.S. trade and 84% of Mexico-U.S. trade remains tariff-free. On October 23, Trump announced that all trade negotiations with Canada were canceled after the Ontario government published a public service announcement with audio clips of former US president Ronald Reagan stating that tariffs on foreign goods are poor policy in the long term. Trump later said he would raise tariffs on Canada by "more than 10%" in response to the advertisement. On February 8, 2026, Trump threatened to block the opening of the Gordie Howe International Bridge, citing Canada's recent trade developments with China and the alleged one-sided nature of the contract (wherein Canada gains all revenue from bridge tolls to pay back construction costs, as Canada built the bridge in its entirety). Trump said the bridge's opening will be delayed until multiple trade and bridge related grievances were resolved. Trump's announcement was criticised by politicians, business leaders and industry groups. ==Reactions and responses==

Canadian reactions The United States tariffs and threats against Canada have harmed historically strong Canada–U.S. relations, caused increases in Canadian nationalism and patriotism, and led to an uptick in anti-Americanism. The same month, a Léger poll found that 27 percent of Canadians considered the U.S. an "enemy", while only 1 percent of Americans thought the same of Canada. store in Ontario featuring a Canadian flag reading "Canadian owned and operated"|alt=The facade of a Canadian Tire with a banner reading "Canadian owned and operated" on a Canadian flag|leftIn the days after the initial tariff announcements, Canadian crowds booed the U.S. national anthem at sporting events featuring American teams. Many Canadians began a boycott of American goods and travel to the United States and a "Buy Canadian" movement gained traction across the country. Both Canadians across the political spectrum and Canadian society at large have grown concerned over threats from the United States; Whereas in early January 2025, the Liberals had trailed the Conservatives in federal election opinion polls by over 20 points for months, the party began to close the gap in polls after the trade war began and Trudeau announced his resignation. and polling suggested a close race between the Carney-led Liberals and the Poilievre-led Conservatives. A March 2025 Abacus Data poll found that 62 percent of Canadians planned to avoid traveling to the U.S. for the next year, and American tourism groups are worried they will lose Canadian tourist traffic. The mayor of Haines, Alaska, a town connected to the outside world only through Yukon, has expressed concern that the tariffs will affect the normally friendly relations between Americans and Canadians. The shift in Canadian travel away from the U.S. could amount to an annual loss of for the U.S. economy. In March 2025, the Trump administration said that beginning on April 11, 2025, Canadians entering the U.S. for more than 30 days are required to register with authorities and be fingerprinted. Other reactions The tariffs could affect negotiations on renewing the USMCA, for which a review is due in 2026. The following month, a poll by the University of Michigan found that the number of Americans expressing confidence in the economy fell by 11 percent in March 2025, and that the number expecting inflation rose. In the United States, Trump's initial decision to impose tariffs on Canada and Mexico was criticized by the editorial board of The Wall Street Journal, which said that his "justification for this economic assault on the neighbors makes no sense" and that Trump had begun "the dumbest trade war in history". Many Americans believe Trump's threats to annex Canada are a joke or a negotiation strategy, and has led to an erosion of international confidence in the U.S. as a reliable trade partner. On March 13, 2025, the WTO said that Canada had formally requested to begin dispute resolution proceedings with the United States, saying that the tariffs violated the U.S.'s commitments under the 1994 General Agreement on Tariffs and Trade. On April 7, Canada also initiated WTO dispute resolution proceedings regarding the U.S. tariffs on cars and car parts. In Mexico, the government and local businesses aimed to bolster a "Made in Mexico" campaign to promote domestic products. Some Mexicans called for boycotts of U.S. products after Trump's initial threat of tariffs, and a poll by the Mexican firm Buendía & Márquez found that 80 percent of Mexicans held a negative opinion of Trump in mid-February 2025, an increase from 66 percent in early January. In February 2026, the United States House of Representatives voted to repeal the tariffs that had been imposed on Canadian goods during Donald Trump's administration. The resolution passed by a 219–211 vote, with a small number of Republican lawmakers joining nearly all Democrats in support. The tariffs had originally been enacted under a national emergency declaration in February 2025, and their repeal represented a rare bipartisan rebuke of Trump's trade policy. Following the vote, President Trump reportedly threatened political consequences for Republicans who voted against the measure. While passage in the House reflects congressional concern over the tariffs, actual repeal would still require Senate approval and presidential assent, and was expected to face a potential veto. ==Economic impact==

Stock market The trade war led investors to fear that tariffs could create inflation by causing rises in both manufacturing costs and consumer prices, leading to volatility in the U.S. stock market. By March 6, the S&P 500 had lost almost all of its gains since November 2024. On March 9, Trump declined to say whether his policies could lead to a recession in the United States. He said in an interview with Fox News that it would take time to see the payoff from his policies, but that they would ultimately be worthwhile, saying "If you look at China, they have a 100-year perspective. We have a quarter. We go by quarters, and you can't go by that. You have to do what's right." The next day, the S&P 500 dropped an additional 2.7 percent—its largest single-day drop of 2025—and the Nasdaq by 4 percent. On March 10, the S&P 500 fell by 1.4 percent, pushing it into a correction, which is defined as a fall in a stock market index of over 10 percent from its peak; the S&P 500 was 10.1 percent lower than its record high, which was on February 19. In Canada and Mexico, stock markets were more stable. By March 6, Mexico's most prominent stock market index, the Índice de Precios y Cotizaciones, had risen 6 percent since the beginning of 2025. Canada's benchmark index, the S&P/TSX, was almost the same level it began the year. This is especially true in the Midwest, a region heavily reliant on oil imported from Alberta. The Canadian government had previously said that U.S. gas prices could increase by per gallon overnight if tariffs were imposed. Tariffs could also increase the cost of electricity in some U.S. states, especially those that rely on Canadian provinces like Ontario, Quebec, and British Columbia for energy. Outside North America, tariffs on energy imports would give European and Asian oil refineries a competitive advantage against their rivals. The tariffs could also lead to price increases in various U.S. imports from Mexico and Canada, including fruits, vegetables, beer, liquor, and electronics from Mexico and potatoes, grains, lumber, and steel from Canada. Price increases would compound with high inflation in the U.S., especially in grocery prices. The cost of Canadian lumber, used by many homebuilders in the U.S., would also likely increase. The tariffs would also cause risk to the U.S. farming and fishing industries. The tariffs pose a risk of "severe recession" in Mexico if maintained. A year-long 25 percent tariff could cause Mexican exports to fall by around 12 percent, ultimately leading to a 4 percent decline in the country's gross domestic product in 2025. The American Chamber of Commerce in Mexico, the group representing U.S. companies in the country, said tariffs would harm both economies and "fail to address the real challenges of security, migration and drug trafficking". The Mexican automobile industry is likely to be most susceptible to upheaval from the tariffs, alongside the electric equipment sector, making it the largest beneficiary of the reprieve given to USMCA-compliant car imports. Canada, a highly trade-dependent economy, will also likely suffer, experiencing harmed economic growth and increased prices for businesses and consumers. The Canadian economy could enter a recession within six months if the tariffs are maintained. Quebec premier Legault said that the U.S. tariffs could cause the loss of as many as 100,000 Canadian jobs within the province. Prices could also increase in Canada for even domestically produced products, mainly if the tariffs cause economic difficulties for smaller businesses. Canadian companies being unable to sell their products to Americans at the same volume would also cause some of them to cut workers, scale back, or even shut down entirely. Canada's mineral processing industry will likely be significantly harmed by the tariffs. ==See also==