At midnight Tuesday, the U.S. instituted 25% tariffs on imported goods from Canada and Mexico and an additional 10% tariff on goods from China, bringing the new tax on Chinese goods to 20%. All three countries quickly responded with vows for reciprocal tariffs, news services reported.

China announced tariffs of up to 15% on some U.S. products, Canadian Prime Minister Justin Trudeau said his country would respond by putting a 25% tariff on U.S. goods coming into Canada, and Mexico President Claudia Sheinbaum said her country would respond with tariffs and “non-tariff measures” to be announced this weekend.

Canada has announced 25% tariffs on a total of about $108 billion of U.S. goods, with tariffs on $20.8 billion of goods going into effect Tuesday. Tariffs on the remaining $86.7 billion of U.S. goods will start in 21 days.

“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should the U.S. tariffs not cease, we are in active and ongoing discussion with provinces and territories to pursue several non-tariff measures,” Trudeau said in a statement.

Worry has gripped Wall Street that the tariffs will slow the economy and increase inflation. The Dow Jones Industrial Average fell more than 600 points Tuesday morning in early trading and is now down about 1,500 points so far this week.

The impact of the tariffs is expected to be felt by many sectors, including the housing industry, which relies on imported products, including softwood and gypsum, from Canada and Mexico. Industry leaders say the tariffs could increase the cost of housing construction and result in higher home prices.

While members of President Donald Trump’s administration maintain the tariffs are in place to force Canada, China and Mexico to do more to stop the flow of illegal drugs, such as fentanyl, Trump has said tariffs are a way to protect the U.S. steel and aluminum industries and to bring manufacturing back to the U.S.

He has also complained about Canada restricting some U.S. companies, including banks, from doing business in the country. He posted in all caps on the social media site Truth Social Tuesday morning that “IF COMPANIES MOVE TO THE UNITED STATES, THERE ARE NO TARIFFS!!!”