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 US trading partners signaled hope that the trade war would not last long.

US futures markets opened lower in a sign that investors were worried the tariffs could spur inflation and drag on growth, as economists have warned.

Trump, less than two weeks into his second White House term, defended the tariffs as necessary to curb illegal immigration and the drug trade.

Canada and Mexico ordered retaliatory measures to Trump's 25% tariffs, which promise to jolt the economies of all three countries, which are tightly integrated through free-trade agreements.

China said it would challenge Trump's 10% tariffs at the World Trade Organization and take unspecified countermeasures.

Critics said the Republican president's plan will slow global growth and drive prices higher for Americans, but Trump defended his decision.

“We're not going to be the 'Stupid Country' any longer,” the Republican president wrote on social media. He added in all caps: “Will there be some pain? Yes, maybe (and maybe not!)”

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

North American companies were braced for the move, which could upend industries from autos to consumer goods to energy.

EY Chief Economist Greg Daco said Trump's tariffs could reduce US 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.

Trump's move was the first strike in a what could be a destructive global trade war that Paul Ashworth of Capital Economics said would lead to a surge in US inflation that would “come even faster and be larger than we initially expected.

US crude oil futures jumped more than $2 to hit $75 per barrel, while stock futures fell. The S&P 500 E-mini futures were down 2%, while Nasdaq futures were down 2.75%.

TUESDAY DEADLINE

The Trump tariffs, outlined in three executive orders, are due to take effect 12:01 a.m. ET (0501 GMT) on Tuesday.

Markets were awaiting developments with anxiety, but some analysts said there was some hope for negotiations, especially with Canada and China.

“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 said the levies are likely to be temporary but the outlook is unclear because the White House set very general conditions for their removal.

A White House fact sheet gave no details on what the three countries would need to do to win a reprieve.

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.

Mexican President Claudia Sheinbaum, raising her fist in the air in a speech outside the capital, vowed resilience.

She accused the United States of failing to tackle its fentanyl problem and said it would not be solved by tariffs.

Sheinbaum said she would provide more details on Monday of the retaliatory tariffs she ordered this weekend.

Canada said on Sunday it will take legal action under the relevant international bodies to challenge the tariffs.

Prime Minister Justin Trudeau also encouraged Canadians on Sunday to boycott their longtime ally after ordering retaliatory tariffs against $155 billion of US goods, from peanut butter, beer and wine to lumber and appliances.

Canadian officials said they were preparing measures to help business who might be hurt by the trade war.

Trump has heaped derision on Canada in particular, with calls for the country to become the 51st US state. On Sunday, he said Canada “ceases to exist as a viable country” without its “massive subsidy.”

FOLLOWING THROUGH

The tariff announcement made good on Trump's repeated 2024 campaign threat, defying warnings from economists that a trade war would erode growth and raise prices for consumers and companies.

Trump declared a national emergency under two laws, the International Emergency Economic Powers Act and the National Emergencies Act, which give the president sweeping powers to impose sanctions to address crises.

Trade lawyers said Trump could face legal challenges for testing the limits of US laws. Democratic lawmakers Suzan DelBene and Don Beyer decried what they called a blatant abuse of executive power. Others warned about rising prices.

“No matter which way you slice it: costs are going to climb for consumers,” Senate Democratic Leader Chuck Schumer said, vowing to try to “undo this mess.”

Republicans welcomed Trump's action.

A Reuters/Ipsos poll, opens new tab 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.

INVESTORS LOOK AHEAD

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.

A European Commission spokesperson said the EU “would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods.”

Europe's biggest carmaker, Volkswagen (VOWG_p.DE), opens new tab, said it was counting on talks to avoid trade conflict.

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

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

White House officials said Canada specifically would no longer be allowed the “de minimis” US 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 US via small packages that are not often inspected by customs agents.