Trump has singled out Canada, which responded with its own tariffs. The U.S. is imposing a 25% tariff on Canadian goods and a 10% tax on oil, gas, and electricity. In retaliation, Canada is placing 25% tariffs on over $155 billion Canadian (US$105 billion) worth of U.S. products, including alcohol and fruit.

Trump dismissed Canada’s importance, stating, “We don’t need anything they have. We have unlimited Energy, should make our own Cars, and have more Lumber than we can ever use.” Despite this, Canada supplies 25% of U.S. oil. He went further, claiming Canada should become the U.S.’s 51st state to benefit from lower taxes and stronger military protection.

Prime Minister Justin Trudeau urged Canadians to buy domestic goods, warning the tariffs would harm North America’s economy. With 75% of Canada’s exports going to the U.S., its countermeasures target a range of industries, from agriculture to steel. Ambassador Hillman noted, “Canadians just don’t understand where this is coming from … and probably there’s a little bit of hurt, right?”

Mexico, also imposing retaliatory tariffs, urged the U.S. to address domestic drug issues instead. After discussions with Trudeau, President Claudia Sheinbaum reaffirmed a stronger Mexico-Canada alliance. Meanwhile, China plans to challenge the tariffs at the World Trade Organization.

For Trump, a key concern is whether inflation will turn the tariffs into a political liability. Previously, he blamed Biden for inflation and promised economic stability under his leadership. However, his new tariffs could have the opposite effect.

Former Treasury Secretary Larry Summers warned they could increase inflation by 1% and hurt American consumers. “On the playground or in international relations, bullying is not an enduringly winning strategy. And that’s what this is,” he said, adding that the move could benefit China’s Xi Jinping by weakening U.S. alliances.

Analysts suggest Trump’s tariffs may ultimately harm the voters he aims to help. The Budget Lab at Yale estimates they could cost the average U.S. household $1,245 this year, amounting to a $1.4 trillion tax increase over a decade. Goldman Sachs believes the tariffs will likely take effect as planned, though a last-minute compromise remains possible.