Sweeping tariffs imposed by President Donald Trump threatened economic upheaval for consumers and businesses in the United States on Tuesday as the country’s biggest trading partners struck back, raising fears of a burgeoning trade war.

Canada and China swiftly condemned the U.S. tariffs and announced retaliatory tariffs against U.S. exports. President Claudia Sheinbaum of Mexico said that if the U.S. tariffs were still in place Sunday, she too would announce countermeasures.

“This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners,” Prime Minister Justin Trudeau of Canada said in a stern and at times biting address Tuesday.

The U.S. tariffs were a stark turnabout from the free-trade evangelism that has marked much of postwar American foreign policy. The measures amounted to 25% tariffs on all imports from Canada and Mexico and 10% tariffs on all imports from China. They came on top of a 10% tariff on Chinese goods put into effect one month ago and a variety of older levies, including those that remain from the China trade war during Trump’s first term.

Amid the tariff dispute, the niceties and flattery that some foreign leaders had employed in the first weeks of the Trump administration seemed to fall away.

‘Dumb thing’

Addressing Trump as “Donald,” Trudeau said at a news conference in Ottawa, Ontario, “You’re a very smart guy. But this is a very dumb thing to do.”

The Canadian government said in a statement that it would impose its own 25% tariff on $30 billion worth of unspecified U.S. goods and that the tariff would extend to $125 billion in goods in 21 days.

China’s Finance Ministry announced a 15% tariff on imports of chicken, wheat, corn and cotton from the United States, as well as a 10% tariff on imports of U.S. sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products.

A sell-off

The U.S. tariffs and reprisals initially prompted sharp sell-offs in global financial markets. Asian, European and U.S. stock markets saw sharp declines, with the automotive sector among those hit hardest, though stocks in some other sectors recovered some ground in the afternoon. U.S. companies, including Target and Best Buy, warned of price increases, while industry groups predicted a rise in the cost of gasoline and energy in some parts of the country.

As volatility and uncertainty spread, Trump and Trudeau traded barbs.

The American president referred to the Canadian prime minister as “Governor Trudeau,” repeating his assertion that Canada should be subsumed into the United States.

“Perhaps he wants to sink the Canadian economy so that he can annex Canada,” Trudeau said in his remarks Tuesday. “We will never be the 51st state.”

The prime minister contrasted Trump’s imposing tariffs on Canada — the “closest partner and ally” of the United States — with his growing closeness to Russia’s president, Vladimir Putin, whom the Canadian leader called “a lying, murderous dictator.”

“What do the American people think about jettisoning America’s friends and allies?” Trudeau asked.

Trudeau’s comments spoke to the betrayal expressed by officials in Canada and Mexico who had gone to considerable lengths in recent weeks to convince the president that they were stepping up enforcement at their borders. Trump had threatened the tariffs after his election in November, saying that the U.S. neighbors to the north and south were not doing enough to halt the flow of drugs and unauthorized migrants into the United States.

In Canada, anger against the United States has brought a measure of unity despite deep political divisions.

The trade dispute and the acrimony that followed filtered through the political system in Canada.

Doug Ford, the premier of Ontario, said Tuesday that he had ordered the removal of all U.S.-made liquor from the province’s alcohol distributor and canceled a contract with Elon Musk’s Starlink. He also threatened to impose a 25% surcharge on electricity exported from Ontario to Michigan, Minnesota and New York state.

Throughout the day, American leaders’ remarks left people unsure what would happen next.

At one point, Trump said on Truth Social, his social media site, that he would respond to Canada’s tariffs with even higher tariffs on Canada’s goods. But later, Howard Lutnick, the commerce secretary, said on Fox News that Trump would “work something out” with Canada and Mexico on tariffs and announce it Wednesday. Lutnick said the Canadians and Mexicans were on the phone with him all day “trying to show that they’ll do better, and the president’s listening.”