[Source: Reuters]

U.S. President Donald Trump on Saturday ordered 25% tariffs on Canadian and Mexican imports and 10% on goods from China starting on Tuesday, risking a new trade war that economists say could slow global growth and reignite inflation.

Trump signed three separate executive orders on the tariffs after a long golf outing in Florida, vowing to keep the duties in place until what he described the national emergency over the drug fentanyl and illegal immigration to the U.S. ends.

Responding to concerns raised by oil refiners and Midwestern states, Trump imposed only a 10% duty on energy products from Canada, with Mexican energy imports facing the full 25% tariff.

At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all U.S. imports from Canada, according to U.S. Census Bureau data.

Automakers would be particularly hard hit, with new steep tariffs on vehicles built in Canada and Mexico burdening a vast regional supply chain where parts can cross borders several times before final assembly.

The U.S. actions sparked immediate vows of retaliation by Canada and Mexico, with no immediate reaction from China.

A White House fact sheet said the tariffs would stay in place “until the crisis alleviated,” but gave no details on what the three countries would need to do to win a reprieve.

The tariff announcement makes good Trump’s repeated threat during the 2024 presidential campaign and since taking office, defying warnings from top economists that a new trade war with the top U.S. trade partners would erode U.S. and global growth, while raising prices for consumers and companies.

Republicans welcomed the news, while industry groups and Democrats issued stark warnings about the impact on prices.

National Foreign Trade Council (NFTC) President Jake Colvin said Trump’s move threatened to raise the costs of “everything from avocados to automobiles” and urged the U.S., Canada and Mexico to find a quick solution to avoid escalation.

Provincial officials and business executives in Canada reacted with outrage, calling for forceful tariffs on imports from the U.S., while senior Mexican and Canadian officials said their countries would respond with retaliatory tariffs.

Tariff collections are set to begin at 12:01 a.m. EST (0501 GMT) on Tuesday, according to Trump’s written order. But imports that were loaded onto a vessel or onto their final mode of transit before entering the U.S. prior to 12:01 a.m. Saturday would be exempt from the duties.

Trump declared the national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs, which allow the president sweeping powers to impose sanctions to address crises.

Trade lawyers said Trump was once again testing the limits of U.S. law, and said the two statutes were untested for broad tariffs. Legal challenges were likely, some said.