Trudeau says Canada will place 25% tariffs on US imports in a retaliatory measure

Toronto: Canada will hit back at US tariffs with 25 percent levies of its own on select American goods, Prime Minister Justin Trudeau said Saturday.

"Canada will be responding to the US trade action with 25 percent tariffs against Can$155 billion ($106 million) worth of American goods," he said in a dramatic tone as he warned of a fracture in longstanding Canada-US ties.

The first round of tariffs would target Can$30 billion worth of US goods on Tuesday followed by further tariffs on Can$125 billion worth of products in three weeks.

Earlier, on Saturday, President Donald Trump signed an order to impose stiff tariffs on imports from Mexico, Canada and China, drawing swift retaliation from the country's North American neighbors in an emerging trade war.

The Republican president posted on social media that the tariffs were necessary “to protect Americans," pressing the three nations to do more to curb the manufacture and export of illicit fentanyl and for Canada and Mexico to reduce illegal immigration into the U.S. The action fulfilled one of Trump’s commitments to voters but threw the global economy and Trump’s own political mandate to lower prices into turmoil.

The tariffs, if sustained, could cause inflation to significantly worsen, possibly eroding voters’ trust that Trump could as promised lower the prices of groceries, gasoline, housing, autos and other goods.

Trump declared an economic emergency in order to place duties of 10% on all imports from China and 25% on imports from Mexico and Canada. But energy imported from Canada, including oil, natural gas and electricity, would be taxed at a 10% rate.

The action provoked an economic standoff with America’s two largest trading partners in Mexico and Canada, upending a decades-old trade relationship with the possibility of harsh reprisals by those two nations.

Mexico’s president immediately ordered retaliatory tariffs and Canada’s prime minister said the country would put matching 25% tariffs on up to $155 billion in U.S. imports. China did not immediately respond to Trump's action.

Trump’s order includes a mechanism to escalate the rates charged by the U.S. against retaliation by the other countries, raising the specter of an even more severe economic disruption.

(With input from agencies)