President-elect Donald Trump's threat to impose tariffs on Canada, China and Mexico on the first day of his administration could dramatically raise prices for Americans on everything from cars to clothes to oil.

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.