Washington: Mounting trade tensions escalated as the United States imposed sweeping tariffs on Canada, Mexico, and China, triggering swift retaliatory measures.

Markets in Asia and Europe fell as analysts warned that the steepest tariffs since the 1940s could disrupt global trade.

The US reinstated 25% tariffs on imports from Canada and Mexico, impacting $918 billion in trade, citing failures to curb illegal immigration and drug trafficking. Canada and Mexico vowed retaliation, with Ottawa imposing 25% tariffs on $30 billion worth of US goods, while Mexico pledged countermeasures.

Meanwhile, Trump increased tariffs on Chinese goods from 10% to 20%, prompting Beijing to impose levies on US agricultural imports and suspend lumber and soybean shipments. China vowed to fight the "trade war to the bitter end."

European leaders criticized the US move, warning it threatens economic stability and could lead to global supply chain disruptions. The EU faces its own tariffs, with Trump's 25% levies on steel and aluminum imports set to take effect from March 12.

Economists warned that the tariffs could raise consumer prices, disrupt industries, and trigger layoffs, with projections indicating the highest US tariff rates since 1936 by 2026.