On February 1, 2025, U.S. President Donald Trump launched a trade war by signing orders imposing 25% tariffs on imports from Mexico and Canada (with a 10% rate on Canadian energy), prompting immediate retaliation threats from Canadian PM Justin Trudeau and Mexican President Claudia Sheinbaum. After a one-month delay negotiated on February 3, the tariffs took effect on March 4, but Trump soon exempted USMCA-compliant goods, leaving over 85% of Canada-U.S. and 84% of Mexico-U.S. trade tariff-free by August 2025. Trump framed the tariffs as a push to cut the U.S. trade deficit, secure borders against fentanyl and illegal immigration, and boost domestic manufacturing, while Trudeau, Sheinbaum, and Trudeau's successor Mark Carney condemned them as unjustified and a violation of the USMCA—with Trudeau even alleging Trump aimed to force Canadian annexation. Economists warned the tariffs would disrupt trade, upend supply chains, and raise consumer prices, given the deeply integrated economies: Canada supplies most U.S. oil and is the top steel/aluminum source, while over $800 billion in goods cross the U.S.-Mexico border annually. In February 2026, the U.S. Supreme Court struck down the tariffs in Learning Resources, Inc. v. Trump, ruling they were improperly imposed under the International Emergency Economic Powers Act.