US President-elect Donald Trump promised earlier this week to impose major tariffs on the country’s three biggest trading partners – Canada, Mexico and China – detailing how he will implement campaign promises that could trigger trade wars.
Trump, who takes office on January 20, 2025, has said he will impose a 25% tariff on imports from Canada and Mexico until they crack down on the entry of drugs, especially fentanyl, and illegal immigrants into the US, in a measure that appears to violate a free trade agreement between the three countries.
Trump also separately outlined “an additional 10% tariff, above and beyond any additional tariff” on imports from China. It was not entirely clear what this would mean for the Asian country, as he had already promised to apply tariffs of more than 60% on Chinese imports – much higher than those imposed during his first term.
The two posts on the Truth Social platform represent some of Trump’s most specific comments about how he will implement his economic agenda since winning the Nov. 5 election with a pledge to “put America first.”
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on ALL products entering the United States and its ridiculous open borders,” Trump said .
The US was the destination for more than 83% of Mexico’s exports in 2023 and 75% of Canadian exports.
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The tariffs could also spell trouble for foreign companies, such as the many Asian auto and electronics manufacturers that use Mexico as a low-cost production gateway to the U.S. market.
The new tariffs appear to violate the terms of the US-Mexico-Canada Agreement (USMCA) on trade. The agreement signed by Trump came into force in 2020 and continued largely duty-free trade between the three countries.
Canada and the US, at one point, imposed sanctions on each other’s products during negotiations that eventually led to the USMCA. Trump will have the opportunity to renegotiate the agreement in 2026, when a “sunset” clause will force the agreement to be withdrawn or negotiations to take place.
After issuing his tariff threat, Trump spoke with Canadian Prime Minister Justin Trudeau. They discussed trade and border security, said a Canadian source familiar with the situation.
“It was a good conversation and they will stay in touch,” the source said.
Trump could be counting on the threat of tariffs to spur an early renegotiation of the USMCA, said William Reinsch, former president of the National Foreign Trade Council.
“This strikes me as more of a threat than anything else,” Reinsch said. “I think the idea is that if you keep hitting them in the face, eventually they will surrender.”
Regarding China, the president-elect accused Beijing of not taking strong enough measures to stop the flow of illicit drugs crossing the Mexico-US border.
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“Until they stop, we will be charging China an additional 10% tariff, above and beyond any additional tariff, on all of their many products coming into the United States of America,” Trump said.
A spokesperson for the Chinese embassy in Washington said China believes economic and trade cooperation with the US is mutually beneficial in nature. “No one will win a trade war or a tariff war,” said Liu Pengyu.
In the run-up to the Nov. 5 election, Trump floated plans for blanket tariffs of 10% to 20% on virtually all imports. He also said he would impose tariffs of up to 200% on all cars crossing the US-Mexico border.
Mexico, Canada and China warn that tariffs harm everyone involved
Officials from Mexico, Canada and China warned that US President-elect Donald Trump’s threat to impose heavy tariffs on products from the country’s three largest trading partners would hurt the economies of all involved, potentially worsening inflation and hitting oil markets. work.
In his initial round of responses to Trump’s surprise announcement last Monday — of a 25% tariff on imports from Canada and Mexico and an additional 10% duty on Chinese goods until they crack down on illicit drugs and immigrants crossing the border — leaders and other high-ranking officials called for dialogue and cooperation.
“For one tariff, another will come, and so on, until we put our common businesses at risk,” said Mexican President Claudia Sheinbaum during a routine press conference. Sheinbaum said he planned to send a letter to Trump and would try to get a call with him to discuss the issue.
Meanwhile, a Bank of Canada official said it is clear that any move by Trump to make good on the threat would reverberate on both sides of the U.S. northern border.
“What happens in the U.S. has a big impact on us, and something like this would clearly have an impact on both economies,” Canadian central bank vice-president Rhys Mendes said during a question-and-answer session in Charlottetown. on Prince Edward Island.
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Earlier, a spokesperson for the Chinese embassy in Washington said: “No one will win a trade war or a tariff war.”
In September, data from the US Department of Commerce showed that the three countries had sent more than $1 trillion worth of goods to the United States in the first nine months of the year, with Mexico in first place, followed by China and Canada.
