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Pres­i­dent Don­ald Trump launched a trade war Tues­day against Amer­i­ca’s three biggest trad­ing part­ners, draw­ing im­me­di­ate re­tal­i­a­tion from Mex­i­co, Cana­da and Chi­na and send­ing fi­nan­cial mar­kets in­to a tail­spin as the U.S. faced the threat of rekin­dled in­fla­tion and par­a­lyz­ing un­cer­tain­ty for busi­ness.

Just af­ter mid­night, Trump im­posed 25% tax­es, or tar­iffs, on Mex­i­can and Cana­di­an im­ports, though he lim­it­ed the levy to 10% on Cana­di­an en­er­gy. Trump al­so dou­bled the tar­iff he slapped last month on Chi­nese prod­ucts to 20%.

Bei­jing re­tal­i­at­ed with tar­iffs of up to 15% on a wide ar­ray of U.S. farm ex­ports. It al­so ex­pand­ed the num­ber of U.S. com­pa­nies sub­ject to ex­port con­trols and oth­er re­stric­tions by about two dozen.