China announced retaliatory trade measures Tuesday following President Donald Trump’s new tariffs, while Mexico and Canada secured temporary relief by agreeing to Trump’s demands on border security.
“I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl,” Canadian Prime Minister Justin Trudeau announced on Monday.
Canada’s leader promised to go through with major new investments in border security, and to start a joint task force with American authorities to crackdown on fentanyl.
“Nearly 10,000 frontline personnel are and will be working on protecting the border. In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.”
But it wasn’t all smooth sailing for Trump.
China’s Finance Ministry responded to Trump’s 10% tariff by announcing 15% duties on U.S. coal and liquefied natural gas, plus 10% on crude oil, agricultural equipment, and large-engine cars. The ministry also imposed export controls on rare earth metals critical for technology manufacturing.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Trump said Monday before China’s announcement.
China’s Commerce Ministry placed PVH Corp. and Illumina on its “unreliable entities list” and launched an anti-monopoly investigation into Google. The new Chinese tariffs take effect February 10, while the ministry said it would challenge U.S. actions at the World Trade Organization.
The White House confirmed Trump will speak with Chinese President Xi Jinping Tuesday about fentanyl trafficking. China has maintained the drug flow is a U.S. domestic issue, although it almost all flows from China through Mexico and onto American streets.
Trump’s original order imposed 25% tariffs on Canadian and Mexican imports, with an additional 10% on Canadian energy products. Both countries secured 30-day pauses after agreeing to enhanced border security measures, including Mexico’s commitment of 10,000 National Guard troops.
China has historically responded aggressively to U.S. trade actions. During Trump’s first term, a two-year trade war saw both sides imposing tariffs on hundreds of billions in goods. Tuesday’s moves suggest another prolonged dispute may be developing as the administration pursues its anti-fentanyl agenda through economic pressure.
Congressional leaders will meet Wednesday to discuss potential legislative responses to China’s retaliation. The Senate Finance Committee announced hearings next week on the economic impact of escalating trade tensions.