On Monday, Trump sent shockwaves across the nation’s northern and southern borders, vowing sweeping new tariffs on Mexico, Canada, as well as China, as soon as he takes office as part of his effort to crack down on illegal immigration and drugs.

Leaders in Mexico and Canada responded to the president-elect’s proposed new tariffs. Observers said the plan might just be the first step in negotiations.

The president-elect’s threat to hit Canada, Mexico and China with new tariffs is already rocking business and diplomatic relationships and could topple the trade pacts he signed in his first term.