President Donald Trump said on Sunday the sweeping tariffs that he has imposed on Mexico, Canada and China may cause “some pain” for Americans, as Wall Street and the largest U.S. trading partners signaled hope that the trade war would not last long.

Trump, who began his second term as president on Jan. 20, defended the tariffs that he announced on Saturday. Canada and Mexico said they were working together to face the 25% U.S. duties on imports, which promise to jolt the integrated economies of three North American countries that have had free-trade agreements for decades.

Canada and Mexico immediately vowed retaliatory measures after Trump’s announcement on Saturday. China said it would challenge Trump’s 10% tariffs at the World Trade Organization and take unspecified countermeasures.

Critics said that the moves against the three largest U.S. trading partners will hurt Americans by driving prices higher and slowing global growth.

Trump defended his decision on social media on Sunday.

“The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the ‘Stupid Country’ any longer,” the Republican president wrote.

Writing in capital letters, Trump added, “This will be the golden age of America! Will there be some pain? Yes, maybe (and maybe not!).”

Trump did not specify what he meant by “some pain.”

A model gauging the economic impact of Trump’s tariff plan from EY Chief Economist Greg Daco suggests it would reduce U.S. economic growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” – high inflation, stagnant economic growth and elevated unemployment – at home.

Financial markets were closed over the weekend but the measures will initially be felt when U.S. stock futures trading 6 p.m. ET (2300 GMT) on Sunday. Markets were awaiting developments with anxiety, but some analysts said there had been some hope for negotiations, especially with Canada and China.

“With only two days before implementation, the tariffs look likely to take effect, though a last-minute compromise cannot be completely ruled out,” Goldman Sachs economists said in a note Sunday.

They added that since the White House set very general conditions for their removal, the levies are likely to be temporary, “but the outlook is unclear.”

The Trump tariffs, outlined in three executive orders, are due to take effect on at 12:01 a.m. ET (0501 GMT) on Tuesday. Trump vowed to keep them in place until what he described as a national emergency over fentanyl, a deadly opioid, and illegal immigration to the United States ends.

China left the door open for talks with the United States. Its sharpest pushback was over fentanyl.

“Fentanyl is America’s problem,” China’s foreign ministry said, adding that China has taken extensive measures to combat the problem.

Canada’s ambassador to the United States, Kirsten Hillman, on Sunday signaled hope for an agreement.

“We’re hopeful that they don’t come into effect on Tuesday,” Hillman said on ABC’s “This Week” program.

Hillman said Canadian officials are ready to keep talking to the United States but that Canadians expect that their government “stands up for itself.”

Trump has sounded particularly dismissive toward Canada, with calls for the country to become the 51st U.S. state and saying it “ceases to exist as a viable country” without its “massive subsidy.”

A Reuters/Ipsos poll released last week showed Americans were divided on tariffs, with 54% opposing new duties on imported goods and 43% in support, with Democrats more opposed and Republicans more supportive.

The tariff announcement made good on Trump’s repeated threat during the 2024 presidential campaign and since taking office, defying warnings from top economists that a new trade war with the top American trade partners would erode U.S. and global growth, while raising prices for consumers and companies.

Less than two weeks into his second term, Trump is upending the norms of how the United States is governed and interacts with its neighbors and wider world.

Trump declared the national emergency under laws called the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs. They give the president sweeping powers to impose sanctions to address crises.

Trade lawyers said Trump was once again testing the limits of U.S. laws, and the tariffs could face legal challenges. Democratic lawmakers Suzan DelBene and Don Beyer decried what they called a blatant abuse of executive power.

Republicans welcomed Trump’s action. Industry groups and Democrats issued warnings about the impact on prices.
“Who will suffer most? American consumers – who will face skyrocketing prices on everything from groceries to gas to cars,” U.S. Representative Josh Gottheimer wrote on social media.

Investors were considering the effects of additional tariffs promised by Trump, including those related to oil and gas, as well as steel, aluminum, semiconductor chips and pharmaceuticals. Trump has also vowed actions against the European Union.
“It’s only a matter of time before the EU is targeted,” said Marchel Alexandrovich of Saltmarch Economics in London.

The European Union said it was not aware of any additional tariffs being imposed on EU products. A European Commission spokesperson said the EU believes tariffs are harmful to all sides but “would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods.”

Europe’s biggest carmaker, Volkswagen, said it was counting on talks to avoid trade conflict.

Automakers would be particularly hard hit, with new steep tariffs on vehicles built in Canada and Mexico burdening a vast regional supply chain where parts can cross borders several times before final assembly.

In a message aimed at Americans, Canadian Prime Minister Justin Trudeau said U.S. citizens would be hurt by rising grocery and gasoline prices, as well as the possible shuttering of auto assembly plants and limited supplies of metals and minerals. Trudeau urged Canadians to boycott the United States and its goods.

Trudeau said on Saturday evening that Canada would respond with 25% tariffs against $155 billion of U.S. goods, including beer, wine, lumber and appliances, beginning with $30 billion taking effect on Tuesday and $125 billion 21 days later.

Mexican President Claudia Sheinbaum did not provide details on planned retaliatory tariffs.

A White House fact sheet said the tariffs would stay in place “until the crisis alleviated,” but gave no details on what the three countries would need to do to win a reprieve.

Trump imposed only a 10% duty on energy products from Canada after concerns raised by oil refiners and Midwestern states. At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all U.S. imports from Canada, according to U.S. Census Bureau data.

The White House officials said that Canada specifically would no longer be allowed the “de minimis” U.S. duty exemption for shipments under $800. The officials said Canada, along with Mexico, has become a conduit for shipments of fentanyl and its precursor chemicals into the U.S. via small packages that are not often inspected by customs agents.