Washington DC - President Donald Trump's trade war with the US' biggest economic partners kicked off on Tuesday as US tariffs on Canada, Mexico, and Mexico went into effect.

Stinging US tariffs on Canadian and Mexican goods came into effect as a deadline to avert Trump's levies passed without the nations striking a deal – a move set to snarl supply chains.

Trade war fears sent markets falling in Asia and Europe on Tuesday in response to what analysts said were its steepest tariffs on imports since the 1940s.

Trump had announced and then paused the blanket 25% tariffs on imports from major trading partners Canada and Mexico in February, accusing them of failing to stop immigration and drug trafficking.

Donald Trump Trump suggests Zelensky "won't be around very long" without ceasefire deal

In pushing ahead with the duties, Trump cited a lack of progress in tackling the flow of drugs like fentanyl into the United States.

The duties stand to impact over $918 billion worth of US imports from both countries.

Mexico supplied 63% of US vegetable imports and nearly half of US fruit and nut imports in 2023, according to the US Department of Agriculture.

More than 80% of US avocados come from Mexico – meaning higher import costs could push up prices for American shoppers.

And the US imports construction materials from Canada, too, meaning tariffs could drive up housing costs.

More than 70% of imports of two key materials homebuilders need – softwood lumber and gypsum – come from Canada and Mexico, said National Association of Home Builders chairman Carl Harris.

Trump also inked an order Monday to increase a previously imposed 10% tariff on China to 20% – piling atop existing levies on various Chinese goods.

Beijing condemned the "unilateral imposition of tariffs by the US" and swiftly retaliated, saying it would impose 10% and 15% levies on a range of agricultural imports from the US.

China's tariffs will come into effect next week and will impact tens of billions of dollars in imports, from US soybeans to chickens.

Donald Trump Trump baselessly blames Democrats as MAGA Republicans face backlash from constituents

The Tax Foundation estimates that before accounting for foreign retaliation, tariffs on Canada, Mexico and China this time would each cut US economic output by 0.1%.

This could complicate Trump's efforts to fulfill his campaign promises of lowering prices for Americans.

Canadian Prime Minister Justin Trudeau on Monday pledged to impose retaliatory 25% tariffs on Washington, saying in a statement: "Canada will not let this unjustified decision go unanswered."

Mexican President Claudia Sheinbaum said her country has contingency plans.