President Trump says the Chinese tariffs are a response to trade deficits, and the flow of fentanyl into the US The United States runs a trade deficit with the European Union, which means it imports more from European countries than it sells to them.

The world’s two largest economies did not strike a deal to avert sweeping U.S. tariffs, which came into effect after midnight. Beijing immediately retaliated.

Feb. 3, 1:57 p.m. EST Trump announced the tariffs against Canada will be paused for 30 days, saying the longtime U.S. ally will implement a $1.3 billion border reinforcement plan that will bolster the U.S.-Canada border with “new choppers, technology and personnel... and increased resources to stop the flow of fentanyl.”