Trump imposes new tariffs on imports from Mexico, Canada and China in new phase of trade war

President Trump is imposing 25% tariffs on most imports from Mexico and Canada, as well as 10% tariffs on imports from China. Mexico supplies more than a quarter of the fresh fruits and vegetables in the U.S., including avocados popular in Super Bowl guacamole. Alfredo Estrella/AFP hide caption

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Alfredo Estrella/AFP

A new global trade war has begun.

President Trump signed executive orders Saturday, imposing 25% taxes on most imports from two of the country's biggest trading partners: Canada and Mexico. Goods from China will be charged a 10% tax.

The tariffs take effect on Tuesday.

Trump said in a social media post he's taking the action in an effort to address the illegal flow of drugs and immigrants across the United States' northern and southern borders.

Canadian crude oil will be subject to a lower, 10% tariff, which could mitigate the effect on U.S. gasoline prices. Midwestern oil refineries are heavily dependent on Canadian crude.

The import taxes could result in higher prices for a wide range of products, including fruits and vegetables, flat screen TVs, and auto parts. The targeted countries are expected to respond with retaliatory tariffs of the own on U.S. exports.

Businesses and shoppers in the U.S. were already bracing for higher prices on everything from gasoline to guacamole.

Many had already started making contingency plans. Trade data released earlier this week showed a sharp rise in imports in December, suggesting some companies tried to stockpile goods before any tariffs take effect.

Some individual shoppers also tried to beat the tariffs. Personal spending on durable goods such as autos and televisions jumped in December, according to figures released Friday by the Commerce Department. Mexico is a leading producer of flat-screen TVs.

Tariffs have come up more than 200 times on corporate earnings calls this month.

The auto industry is expected to be particularly hard hit because it is highly integrated, relying on manufacturing in all three countries.

General Motors told financial analysts on Tuesday that it could shift some pickup truck production out of Mexico and Canada if tariffs are imposed. But the automaker is reluctant to act while the trade landscape is still uncertain.

"We are prepared to mitigate near-term impacts," said CEO Mary Barra. "What we won't do is spend [a] large amount of capital without clarity."