While China could offset American tariffs by letting its currency fall, that might endanger Beijing’s recent efforts to stabilize the economy.

The Canadian dollar and Mexican peso slumped on Tuesday after President-elect Donald Trump said he would impose tariffs on products from Canada, Mexico and China, sparking volatility as investors braced for trade spats.

The president-elect says he would impose tariffs on all imports from Canada and Mexico, which could hurt the auto industry.

Canada is already examining possible retaliatory tariffs on certain items from the United States should President-elect Donald Trump follow through on his threat to impose sweeping tariffs on Canadian products,