President Donald Trump’s latest threat to impose hefty tariffs on Canada and Mexico could send shockwaves across North America. With just a signature, he could slap a 25% tax on all goods from these neighboring countries, potentially triggering a full-blown trade war and economic turmoil.

The move, aimed at pressuring Canada and Mexico to tighten border security, could backfire spectacularly. Experts warn that such tariffs would likely push both nations into recession while driving up prices for American consumers on everything from cars to gasoline. The ripple effects could be devastating, especially for industries like auto manufacturing, where supply chains stretch seamlessly across all three countries.

“This isn’t just a trade skirmish—it’s a full-blown trade war,” said one economist. “Jobs would be lost, homes could be at risk, and the economic fallout would be massive.”

Despite the dire warnings, some analysts believe Trump might be bluffing. After all, he’s made similar threats before without following through. For instance, in 2019, he vowed to impose tariffs on Mexico but never did. Wall Street seems unconvinced too, with investors showing little panic and CEOs holding off on drastic measures.

Still, the stakes are high. Canada and Mexico supply 71% of U.S. oil imports, and tariffs could spike gas prices by up to 50 cents a gallon in some regions. Meanwhile, Mexico’s economy, heavily reliant on U.S. trade, would be hit hardest, potentially worsening border issues—a key concern for Trump.

Canada isn’t sitting idle either. Prime Minister Justin Trudeau has hinted at retaliatory tariffs on American goods, from steel to whiskey. Such a tit-for-tat escalation could harm all three economies, with the U.S. losing an estimated $200 billion in GDP.

As businesses and investors brace for uncertainty, one thing is clear: Trump’s tariff gamble could reshape North America’s economic landscape—for better or worse.