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Border battles … The North American trade war is getting ugly. President Trump announced sweeping tariffs on Canada and Mexico on Friday, triggering swift retaliation from America’s largest trading partners.  Trump’s executive order levies a 25% tariff on most Canadian and Mexican imports and 10% on Canadian oil and all Chinese goods. (You might wonder why China got the better end of the bargain here, and it’s because we have less leverage. Higher tariffs on China could disrupt global supply chains and more significantly raise consumer prices.)  Canada has decided to hit back with 25% tariffs on $20 billion worth of American goods, including beverages, cosmetics, and paper products—with a second wave coming soon. Prime Minister Justin Trudeau called the tariffs harmful to both Canadians and Americans and urged consumers to “choose Canada” in response. Some provinces plan to remove American liquor brands from store shelves, dealing a direct blow to U.S. exports.  Mexico has vowed its own retaliation and we should get more details on that today.  An Oxford Economics analysis released in November demonstrates the historical pivot these tariffs reflect, with economists’ “full-blown Trump scenario” falling below the 25% tariffs placed on our neighbors to the north and south.

Here’s a roundup of reactions from the business world via Business Insider: United Steelworkers – Opposes tariffs on Canada, calling it a key ally with an integrated economy. National Association of Home Builders) – Says tariffs on Canadian lumber and Mexican gypsum will drive up home construction costs.  National Association of Manufacturers – Warns tariffs will disrupt supply chains, increase costs, and threaten U.S. manufacturing jobs.  Shopify (SHOP) CEO Tobi Lütke – Opposes tariffs but also criticizes Canada’s retaliation, saying cooperation is better than escalation.  Billionaire Mark Cuban – Supports Canadian and Mexican retaliation, calling tariffs harmful to businesses and consumers.