WASHINGTON — President Donald Trump unleashed the first salvo of his tariff war, with general levies of 25% on Canada and Mexico and 10% on China — the start of a wave of promised trade barrages against foreign allies and adversaries alike.

Trump signed orders for the tariffs Saturday, according to White House officials who briefed reporters on condition of anonymity. The tariffs take effect at 12:01 a.m. on Tuesday.

The orders also include retaliation clauses that would increase U.S. tariffs if the countries respond in kind. The new measures will be on top of existing trade levies on those countries.

Energy imports from Canada will be spared from the full 25% levy and will face a 10% tariff. The White House officials said that was intended to minimize upward pressure on gasoline and home-heating oil prices.

The move threatens to have sharp economic impacts for the U.S. and the nations targeted. The countries are the largest three sources of U.S. imports, accounting for almost half of total volume.

Trump campaigned on a platform of extensive tariffs and he followed through, despite warnings from most mainstream economists and from business groups that trade levies will disrupt supply chains, raise prices for consumers already wary of inflation and reduce global trade flows.

Sweeping measures

The order on Saturday revoked the so-called de minimis exemption for small parcels and packages, one official said, which will apply tariffs more widely to small shipments and impact e-commerce and online retailing. The US loses a tremendous amount of tariff revenue by using the exemption, according to an official.

The measures Trump is taking will have particularly stark implications for the auto and energy sectors.

Auto interests warned that because of the tight integration of U.S. and Canadian manufacturing, the tariffs could have steep impacts on the sector.

“The imposition of tariffs will be detrimental to American jobs, investment and consumers,” Jennifer Safavian, the president of Autos Drive America, said in an emailed statement. “US automakers would be better served by policies that reduce barriers for manufacturers, ease regulations that hinder production and create greater export opportunities.”

Under an energy emergency Trump declared his first day in office, affected products given that lower 10% tariff also include refined gasoline and diesel, uranium, coal, biofuels and critical minerals.

Parts of the US, including the Pacific Northwest and Northeast, are deeply reliant on electricity or gas flows from Canada. And oil industry advocates have warned against even a 10% increase in the cost of crude inputs into Midwestern refineries that have few near-term options to substitute with U.S. supplies.

Markets have been gripped by uncertainty as they awaited Trump’s decision on the tariffs and there are looming questions about how the levies will impact stocks.

In the 10 days since Trump’s initial tariff threat on his first full day in office, the S&P 500 Index was essentially flat while equity benchmarks in Europe, Canada and Mexico were all higher. The Nasdaq Golden Dragon Index — comprised of companies that do business in China but trade in the U.S. — jumped more than 4%.

Automakers such as General Motors Co., Ford Motor Co. and Stellantis NV, which have global supply chains and massive exposure to Mexico and Canada, could see significant swings.

Trump’s tariffs deliver on a threat to punish the three countries for what he says is a failure to prevent the flow of undocumented migrants and illegal drugs, though he had also teased the possibility of a reprieve if Mexico and Canada took steps to address his concerns. Both did, but it wasn’t enough. Trump said flatly this week he’d proceed, and said Friday there was nothing the countries could do to stop him.

Officials on the call Saturday justified the tariffs by citing the flow of fentanyl and other illegal drugs across the border, as well as illegal immigration.

Retaliatory steps

Prime Minister Justin Trudeau is expected to speak on the tariffs later Saturday.

The Trump administration has regularly warned Canada that any retaliatory tariffs would lead the US to escalate its own measures — raising the prospect of a spiraling trade war, according to an official familiar with the situation.

The order enacting the tariffs on Canada creates a process to remove them. Homeland Security Secretary Kristi Noem can inform Trump if Canada “has taken adequate steps to alleviate this public health crisis through cooperative enforcement actions,” and the tariffs are removed if he agrees.

Canada is set to impose retaliatory countertariffs, the nation’s natural resources minister said in an interview on Friday.

“We will focus on tariffing American good that actually are sold in significant quantities in Canada, and especially those for which there are readily available alternatives for Canadians,” Jonathan Wilkinson said.

Former Canadian Finance Minister Chrystia Freeland, a candidate to succeed Justin Trudeau as prime minister, suggested hitting Trump ally Elon Musk directly by applying a 100% tariff on Tesla Inc. electric vehicles.

Dennis Darby, president & CEO of the Canadian Manufacturers and Exporters group said Saturday that about half of its members have considered reducing investment in Canada or stopping new investment and reducing hiring.

A large proportion have accelerated shipments into the U.S. If tariffs are implemented, about half of manufacturers said they would stop new hiring. Most companies will not only reconsider new investment, but about 40% would look at shifting production to the U.S. if they could.

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(With assistance from Thomas Seal, Brian Platt and Alex Vasquez.)

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