Canada and China have announced counter-tariffs on US goods in response to tariffs imposed by US President Donald Trump. Mexico also expected to follow suit with its president set to announce retaliatory tariffs on Sunday.

US Commerce Secretary Howard Lutnick stated that Trump is considering a trade deal with Canada and Mexico to ease tensions.

However, analysts believe this escalating tariff conflict could turn into a full-scale trade war, impacting all involved economies.

Starting Tuesday new US tariffs on Canada, Mexico, and China took effect. Without delay, both Canada and China announced counter-tariffs the same day.

Canadian Prime Minister Justin Trudeau condemned Trump’s decision, calling it an act of recklessness. In retaliation, Canada imposed a 25% tariff on $207 billion worth of US goods and warned that, if necessary, another $862 billion in goods could be targeted within 21 days.

China also refused to bow to US pressure. A foreign ministry spokesperson stated that China will stand firm against Trump’s trade policies.

On the same day, Beijing announced a 15% tariff on US products and added 15 American firms to its export control list, effectively banning Chinese companies from doing business with them.

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Mexico appears to be following in the footsteps of Canada and China. President Claudia Sheinbaum announced that Mexico would impose retaliatory tariffs on US goods starting Sunday.

To prevent further economic strain, Trump is considering a trade agreement with Canada and Mexico, according to Commerce Secretary Howard Lutnick. He confirmed discussions with officials from both countries, and a Canadian government official also verified these talks.

Experts warn that if the situation remains unresolved, the trade war could escalate, causing significant damage to the economies of all four nations involved.

US Toy Industry Faces Uncertainty Due to Tariff Policy

Trump’s new industrial policies have created uncertainty in the US toy industry. During Toy Fair 2025 at the Javits Center in New York, industry leaders voiced concerns over the impact of tariffs on toy prices.

Most toys sold in the US are manufactured in China. With the Trump administration increasing tariffs on Chinese goods, toy manufacturers fear rising production costs will ultimately burden consumers.

Industry experts predict that additional tariffs will lead to higher toy prices, making it difficult for buyers. Increased production costs will leave companies with no choice but to pass the expenses on to consumers. Retailers, too, may struggle with these rising costs.

To manage the situation, some toy companies are considering relocating production facilities outside China to avoid excessive tariffs. Manufacturers are also working with retailers to develop pricing strategies to maintain sales.

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Business leaders argue that toys play a vital role in children’s mental and physical development. They are urging policymakers to exempt the toy industry from these tariff policies to ensure affordability for consumers.