The Trump administration has introduced significant new tariffs on imports from Mexico, Canada, and China, adding fresh tensions to global trade relations. These measures, which came into effect on 4 March 2025, impose a 25% duty on imports from Mexico and Canada, while Canadian energy exports face a 10% tariff. Tariffs on Chinese goods have also been doubled from 10% to 20%.
These changes are being justified as part of a wider effort to protect US industries, reduce illegal drug trafficking, and strengthen border control. However, markets reacted swiftly, with the S&P 500 falling by 2%, while both the Canadian dollar and Mexican peso hit one-month lows. Canada and China have already announced retaliatory measures, raising concerns about a prolonged trade dispute.
The US government claims that these tariffs are necessary to protect American manufacturing, reduce trade imbalances, and generate revenue. Goods from China, Mexico, and Canada accounted for over 40% of total US imports last year, making these tariff hikes highly significant.
Another reason given for these trade measures is the fight against illegal fentanyl, with Washington alleging that China supplies raw materials while drug cartels in Mexico and Canada process and distribute it. Canadian Prime Minister Justin Trudeau has strongly rejected these claims, pointing out that Canada is responsible for less than 1% of fentanyl entering the US.
The tariffs are also being used as a negotiation tactic, with President Trump suggesting that Mexico and Canada could avoid these charges if they made economic and political concessions. However, both nations have responded with countermeasures rather than compliance, increasing tensions in North American trade.
The 25% tariffs on imports from Canada and Mexico are expected to have widespread consequences for industries reliant on North American trade. The automotive sector is particularly vulnerable, as many manufacturers rely on parts and materials sourced from across the continent.
The energy sector has also been affected, with a 10% tariff on Canadian oil and electricity exports. Canada, the largest foreign supplier of oil to the US, has warned that these measures could disrupt energy markets and increase costs for American consumers.
In response, Canada has imposed its own tariffs on $107 billion worth of US exports. Additionally, Ontario’s Premier has proposed limiting electricity exports to states such as Michigan and New York if the trade conflict escalates further. Mexico has also promised to introduce its own retaliatory trade measures, with further details expected in the coming weeks.
The trade dispute between the US and China has escalated further, with tariffs on Chinese goods doubling from 10% to 20%. This move directly affects industries such as electronics, manufacturing, and consumer goods, with higher costs expected for products including laptops, smartphones, and industrial machinery.
In response, Beijing has introduced new tariffs on US agricultural products and has placed restrictions on major American firms operating in China. A spokesperson for the Chinese government warned that Beijing is willing to take further action if necessary, while also urging the US to return to negotiations.
For companies that depend on international trade, these tariffs present serious challenges that require immediate action.
One of the most effective strategies is diversifying supply chains by seeking alternative suppliers in regions such as Southeast Asia, Europe, and Latin America. Many firms have already begun shifting production away from China to reduce exposure to high tariff rates.
Another critical approach is optimising tariff management. Businesses can make use of duty drawback programmes, free trade zones, and product reclassification strategies to minimise import costs. Navigating complex customs regulations effectively can help firms avoid unnecessary expenses.
Working with a specialist logistics provider is also key. Our team provides customs compliance support, freight optimisation, and alternative trade route planning to help businesses adjust to evolving trade policies and keep their supply chains running smoothly.
There is growing speculation that the US may soon impose tariffs on imports from Europe and the UK, which could further impact global trade. If this happens, industries such as automotive manufacturing, pharmaceuticals, and technology could see new barriers to exporting goods to the US.
With so much uncertainty surrounding trade policy, businesses must stay informed and proactively adjust their logistics strategies. At Jenkar, we help companies navigate these challenges by providing tailored logistics solutions that minimise disruption and control costs.
The latest US tariffs on Mexico, Canada, and China have created fresh complications for businesses operating in global trade. As retaliatory tariffs come into effect, many companies are facing higher costs, disrupted supply chains, and an unpredictable economic environment.
If you’re worried how the U.S. trade tariffs will affect your supply chain, please get in touch with a member of our team to see how we can help you navigate these disruptions. At Jenkar, we remain committed to making sure our customers’ requirements are met and that we are providing a reliable and trustworthy service, ensuring your cargo gets where it needs to go.
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