Canadian PM criticises Trump over tariffs - and sends bold message to Americans

Canada's prime minister Justin Trudeau has labelled new tariffs imposed by US president Donald Trump as a "dumb thing to do".

It was confirmed overnight that tariffs on goods coming into the US from Mexico, Canada and China had come into effect.

Mr Trump's expansion of tariffs to cover the top three trading partners of the United States has been met with promises of retaliation and a retreat in stock market values globally.

Mr Trudeau, speaking in a press conference on Tuesday, said his government would file a legal challenge against the US at the World Trade Organisation, and that Canada was considering its options.

"Today the United States has launched a trade war against Canada, its closest partner and ally, its closest friend," he said.

"They have chosen to sabotage their agenda. There is absolutely no justification or need for these tariffs today."

He also described the tariffs as a "dumb thing to do" and that it undermined his understanding of an agreement he made with Mr Trump over fentanyl production.

Mr Trudeau also warned it would impact American workplaces and add to inflation in the US.

Addressing the American public, he said: "We don't want this... but your government has chosen to do this to you."

The new tariffs will be felt heavily by all exporters in those countries, but also by US companies which rely on supplies from them.

Mexico and Canada face tariffs of 25%, with 10% for Canadian energy. Tariffs on Chinese imports have doubled, raising them from 10% to 20%.

Canada announced it would retaliate immediately, imposing 25% tariffs on US imports worth C$30bn (£16.3bn).

It added that the tariffs would be extended in 21 days to cover more US goods entering the country without a climbdown.

Mr Trump responded by saying that he would match any Canadian tariffs immediately through higher duties.

At a news conference, outgoing prime minister Justin Trudeau described the tariffs as "dumb" and said Canadian companies would be given government support that would even extend to protections against takeover interest caused by the trade war.

Mexico threatened both reciprocal tariffs along with non-tariff measures.

China also vowed to retaliate and reiterated its stance that the Trump administration was trying to "shift the blame" and
"bully" Beijing over fentanyl flows.

Stock markets were down sharply across the world on Tuesday, with the Dow Jones Industrial Average and the broader S&P 500 on course for big falls for a second day.

The Nasdaq later entered positive territory.

Share prices for carmakers were among the worst performers generally.

Companies including General Motors, VW and Mercedes saw sharp falls as each has factories in Mexico which sell into the US.

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European stock markets had achieved record levels on Monday on the back of higher defence spending pledges.

But the German DAX closed more than 3.5% off. Its leading faller was Continental, the car parts manufacturer best known for its tyres, which saw an 11% decline.

The CAC in Paris was down by almost 2% while the FTSE 100 closed 1.3% lower as fears of an expanded trade spat overcame global growth hopes.

The implications were playing out more widely.

Oil costs were down by 1.5%, with Brent crude trading at six-month low of $70 a barrel.

Cryptocurrencies were hit too amid the flight from risk. Bitcoin was trading at $83,170 - far below the $100k+ witnessed when Mr Trump took office.

There was also evidence that investors saw the tariffs as an own goal because the US dollar - usually a safe haven in times of market woes - came under pressure.

The pound was trading at its highest level versus the dollar since mid-December at just shy of $1.28.

The main threat to the US is that higher import costs, caused by tariffs, push up inflation as those costs are passed on.

Consumers in the US could see price hikes within days, one expert said.

Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said "the automobile sector, in particular, is likely to see considerable negative consequences".

This is due to supply chains that "crisscross the three countries in the manufacturing process" and " because of the expected increase in the price of vehicles, which can dampen demand," he added.

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The Trump administration is gearing up to bring in other tariffs in the coming weeks.

On 2 April, reciprocal tariffs will take effect on all countries that impose duties on US products.

He is also considering 25% tariffs on goods from the EU "very soon" after claiming the bloc was created to "screw the United States".

(c) Sky News 2025: Canadian PM criticises Trump over tariffs - and sends bold message to Americans