Donald Trump has said that if he becomes president again, he will sign an executive order imposing a 25% tariff on all products imported into the United States from Mexico and Canada and imposing additional duties on China.
“On January 20th, in one of my first of many executive orders, I imposed a 25% tariff on Mexico and Canada on all products imported into the United States,” Trump said in a post. We will sign all the necessary documents to impose that ridiculous open border.” In real social.
Trump said the tariffs will remain in place until both countries crack down on drugs, particularly fentanyl, and immigrants who cross the border illegally.
In a subsequent post, President Trump announced that the United States would “impose an additional 10% tariff on China, above and beyond any additional tariffs, on many Chinese products imported into the United States.”
He said the additional tariffs were due to China’s failure to control the number of drugs entering the United States. China is a major producer of precursor chemicals that are bought by drug cartels, including Mexico, to make fentanyl, a highly potent synthetic opioid.
“I have had numerous discussions with China about the large amount of drugs, especially fentanyl, being sent to the United States, to no avail…I intend to charge China the above 10% additional tariff until they stop. All of the company’s many products imported into the United States will not be subject to additional tariffs. ”
In response, China warned that “there are no winners in a trade war.”
Chinese Embassy Spokesperson Liu Pengyu said China took steps to combat drug trafficking after an agreement was reached between Joe Biden and Xi Jinping last year.
“The Chinese side has informed the US side about the progress of US-related anti-drug operations,” he said in a statement. “All of this proves that the idea that China would knowingly allow fentanyl precursors to flow into the United States is completely contrary to facts and reality.”
Canada’s Deputy Prime Minister Chrystia Freeland issued a statement Monday night saying her country’s top priority is the security of its borders and the integrity of its shared border with the United States. President Trump and Canadian Prime Minister Justin Trudeau spoke on Monday night about trade and border security, Reuters reported, citing Canadian sources with direct knowledge of the situation.
Freeland’s statement did not directly mention tariffs. It also said Canada Border Services Agency, the U.S. Drug Enforcement Agency and U.S. Customs and Border Protection “work together every day to stop the scourge of fentanyl coming from China and other countries.”
Bill Ackman, CEO of New York-based hedge fund Pershing Square Capital Management, told X: “Donald Trump uses tariffs as a weapon to achieve economic and political outcomes that are in the best interest of the United States, and his America First policy is a policy that Trump has adopted in foreign policy since before he took office. It’s a great way to make change happen.”
The dollar rose against the Chinese yuan to its highest level since July as markets reacted to Trump’s comments. The dollar rose nearly 2% against the Mexican peso and hit a four-and-a-half year high against the Canadian dollar. Most Asian stock markets were lower, with European stocks also lower in early trading.
The mood among German exporters improved slightly this month, despite the threat of new US tariffs. The Ifo Economic Institute’s Export Expectations Index was -5.9 points in November, the first increase in six months from -6.5 points in October.
“Businesses are anxious, but they are still waiting to see what kind of trade policy President Trump will ultimately implement,” said Klaus Wohlrabe, head of research at Ifo. “Furthermore, the dollar has appreciated significantly since the election, which could benefit exporters.”
On the campaign trail in October, Trump described tariffs as “the most beautiful word in the dictionary” and vowed to reduce U.S. companies’ use of foreign products and parts by raising costs. He campaigned on a promise to raise tariffs on all goods imported from China to 60% and on goods imported to other countries to 20%. He said the policy will strengthen the United States’ international trade position and promote U.S. job growth.
Tariffs are taxes that are levied when goods cross national borders. Import tariffs like those proposed by President Trump could protect domestic industries from foreign competition while also providing tax revenue for the government. However, these are widely considered by economists to be inefficient tools that typically leave consumers and taxpayers bearing the brunt of the higher costs.
Countries typically respond to tariffs like those proposed by President Trump with their own retaliatory tariffs, which could spark a trade war, as happened between the United States and China during Trump’s first presidency. There is sex.
“Tariffs are essentially sales taxes, raising the price of almost every good we buy. They are also regressive, taking a greater share of the paychecks of working people than from the rich. Former U.S. Secretary of Labor Robert Reich posted on social media.
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The Peterson Institute for International Economics, a nonpartisan research organization based in Washington DC, estimates that President Trump’s proposed tariffs would cost average American households more than $2,600 (£2,100) a year. There is.
President Trump’s proposal comes days after he selected hedge fund manager Scott Bessent to be Treasury secretary. Many Wall Street executives believe the move signals a more moderate approach to tariffs.
Matt Simpson, senior market analyst at Citi Index, told Reuters: “It’s almost as if President Trump wants to remind the market who’s in charge by appointing Scott Bessent as Treasury secretary. “This is the person the market expects to cool President Trump’s momentum.”
While the 10% tariff pledge is lower than previous threats against China, it is likely a start, especially given that China’s economy is in a much more vulnerable position than it was during the long-running trade war between the two countries. Analysts said it was probably a gamble. Real estate downturn, debt risks, and weak domestic demand.
William Reinsch, a senior adviser at the Center for Strategic and International Studies, said the move was typical of Trump’s “threat and then negotiate.”
Tara Gilari, director of economic analysis at the Chamber of Progress, a U.S. industry group, reacted to President Trump’s tariffs by saying they would lead to higher prices for consumers.
“President Trump vows to impose a 25% tariff on all Mexican/Canadian imports if elected. This means higher prices for Americans. Tariffs = taxes paid at stores. Cars, food, Everything like electronics is expensive. Even the grocery bill goes up. Businesses can’t absorb 25%. It hits your wallet,” she wrote in a social media post.
The proposed tariffs also hint at plans for the United States-Mexico-Canada Agreement (USMCA), which Trump renegotiated during his first term, and could foreshadow future trade wars.
“While the USMCA agreement is technically only supposed to be renegotiated in 2026, Trump is likely to use today’s tariff announcements to increase trade relations with Canada and Mexico,” said Alex Lu, foreign exchange and macro strategist at TD Securities. “They’re probably trying to start the renewal process early.”
“Mexico and Canada remain highly dependent on the U.S. market, so their ability to escape the threat posed by President-elect Trump remains limited,” said Wendy, vice president of the Asia Society Policy Institute and a former U.S. trade official. Cutler told AFP.
Last year, more than 83% of Mexico’s exports went to the United States, and 75% of Canada’s exports went to the country.
