China, Canada and Mexico hit back at Trump’s tariff plan amid warnings of impact on US economy – live | Trump administration

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Canadian Prime Minister Justin Trudeau says he spoke to Donald Trump about potential tariffs on Canada

Trump laid out his vision for tariffs on Canada, Mexico, and China on the Truth Social social media platform last night, which would see the US’s neighbors to the north get slapped with 25% tariff on all of its exports to the US.

“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 coming into the United States, and its ridiculous Open Borders,” Trump wrote.

Roughly 77% of Canadian exports go to the US, according to the Toronto Region board of trade. Trade experts warned of sweeping economic consequences for all those involved.

Trudeau hopped on a call with the president-elect today, and afterward said “it was a good call,” adding that they “obviously talked about laying out the facts, talking about how the intense and effective connections between our two countries flow back and forth.”

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Homan was the architect of the family separation policy when he led ICE during Trump’s first presidential term, which meant authorities were permitted to separate parents and legal guardians from minors held in immigration detention so that they could prosecuted.

When questioned about policies in the previous Trump administration that led to family separation in CBS interview, Homan said there was a simple solution: “Families can be deported together.”

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Trump’s border czar nominee to visit US-Mexico border with Texas governor

Trump’s pick for border czar, Tom Homan, is visiting the US-Mexico border today with Texas governor Greg Abbott.

Both republicans are immigration hawks and longtime Trump loyalists.

Homan told Fox News host Sean Hannity that he is willing to jail Denver Mayor Mike Johnston for protesting his mass deportation.

The acting former acting director of Immigration and Customs Enforcement said: “Me and the Denver mayor, we agree on one thing – he’s willing to go to jail. I’m willing to put him in jail because there there’s a statute. It’s Title 8 United States Code 1324 (iii). And what it says is it’s a felony if you knowingly harbor and conceal an illegal alien from immigration authorities. It’s also a felony to impede a federal law enforcement officer.”

Homan is also a former Heritage Foundation fellow and Project 2025 contributor.

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Updated at 11.03 EST

Donald Trump’s transition team is planning for all cabinet picks to receive sweeping security clearances from the president-elect and only face FBI background checks after the incoming administration takes over the bureau and its own officials are installed in key positions, according to people familiar with the matter.

The move appears to mean that Trump’s team will continue to skirt FBI vetting and may not receive classified briefings until Trump is sworn in on 20 January and unilaterally grant sweeping security clearances across the administration.

Trump’s team has regarded the FBI background check process with contempt for months, a product of their deep distrust of the bureau ever since officials turned over transition records to the Russia investigation during the first Trump presidency, the people said.

But delaying FBI vetting could also bring ancillary PR benefits for the Trump team if some political appointees run into problems during a background check, which could upend their Senate confirmation process, or if they struggle to obtain security clearances once in the White House.

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Joe Biden and the first lady, Jill Biden, will attend Donald Trump’s inauguration in January, the White House said.

“The president promised that he would attend the inauguration of whomever won the election. He and the first lady are going to honor that promise and attend the inauguration,” the White House’s senior deputy press secretary Andrew Bates told reporters on Monday.

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10 observations and ramifications about Trump’s tariff announcement

Deutsche Bank has published ten conclusions, ramifications and observations following Donald Trump’s announcement of the impending imposition of a 25% tariff on products from Mexico and Canada, and 10% on Chinese imports, that he intends to make policy when he formally enters the White House on 20 January.

1. Free trade agreements (FTAs) are not safe

Canada and Mexico are part of the United States-Mexico-Canada Agreement (USMCA) which was negotiated by Trump himself. It is clear that even countries with existing agreements with the US can be subject to tariffs.

2. Right after the Treasury Secretary announcement

Tariffs are being announced just a few hours after the nomination of Scott Bessent as Treasury Secretary. This is pushback to the argument that tariffs are taking a backseat to the Trump agenda.

3. The tariffs cover 40% of total US trade

While only limited to three countries, the impact is economically large at it applies to America’s three largest trading partners after the Euro-area.

4. Presidential authority, for now

It is explicitly mentioned that executive authority will be used to impose these tariffs rather than the legislative route. We suspect that the most likely avenue will the International Economic Emergency Powers Act (IEEPA).

5. Tactical and transactional, for now

The announcement is only targeted at three countries and leaves the prospect of tariff removal open. There is no mention of tariffs as a strategic tool to deal with trade imbalances or as a revenue-raiser.

The optimistic take is that this means that some of the most extreme scenarios under universal tariffs will not happen. The pessimistic interpretation (which we favour) is that this is an opening salvo and the targeted focus on immigration and drugs is required to trigger broad-based executive authority under the IEEPA.

6. Watch the China legislation in Congress

Just last week a new bill was submitted to the Senate removing permanent trade relations with China and targeting 50%-100% tariffs. There is already a similar bill in the US House of Representatives. For us, whether the tariff discussion turns strategic via legislation is a big outstanding question to be resolved.

7. Beware complex supply chains

EUR/USD is reacting with relief that no mention of European trade was made. But note for example that German car manufacturers have huge production capacity in Mexico that is then on-sold to the US. Also note the complex inter-play of Chinese and Mexico trade which makes the negative impact of tariffs on Mexico even bigger.

8. Canada most under-priced

The Canadian dollar has had the largest risk-adjusted weakening move since the tariffs were announced. Canada is the most vulnerable developed market country to extra tariffs but also the least under-priced in terms of risks.

9. The softer the market reaction, the greater the likelihood of more tariffs

The equity market reaction has so far been very benign, we would argue likely on the back of the transactional interpretation. That US domestic small-caps have been leading the recent market rally also helps reduce the impact.

The first Trump administration showed that the more benign the market reaction, the greater the likelihood of further escalation.

10. Truth Social is the new avenue for announcements

During the first Trump administration, it was Twitter. Market participants need to be watching the President’s new social media platform now.

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Updated at 11.03 EST

Mexican president Claudia Sheinbaum’s suggestion that the country could retialiate with tariffs of its own could indicate that Donald Trump faces a much different Mexican leader than he did in his first term.

Andrés Manuel López Obrador, the former Mexican president, was a charismatic, old-school politician who developed a chummy relationship with Trump, according to Associated Press.

The two were eventually able to strike a deal in which Mexico helped keep migrants away from the border – and received other countries’ deported migrants – and Trump backed down on the threats.

But Sheinbaum, who took office in October, is a stern leftist ideologue trained in radical student protest movements, and appears less willing to pacify or mollify Trump, AP writes.

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Peter Stone

Donald Trump has quickly tapped big donors and political allies for top posts to roll back environmental and health regulations, cut taxes and government spending in ways that will benefit key backers, say government watchdogs.

Armed with blueprints to expand presidential power in aggressive ways and backed by a bevy of billionaire donors and ultra loyalists who helped him win, the president-elect’s transactional style of awarding powerful posts to backers such as X owner Elon Musk, or allies of others such as fracking mogul Harold Hamm, is seen as “unprecedented”, and will likely boost their bottom lines, say critics.

Among the super-rich donors helping shape the president-elect’s administration, no one seems to loom larger than Musk, who gave some $200m to a pro-Trump Super Pac.

Musk has become a ubiquitous adviser to Trump who tapped him to co-chair an outside federal advisory panel on “government efficiency”, an effort fraught with conflicts given the billions of dollars in government contracts that Musk’s companies now boast.

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Mexican president to warn Trump tariffs will cause inflation and job losses

Mexico’s president Claudia Sheinbaum said she will send a letter to Donald Trump to warn him that his pledge to impose across-the-board tariffs of 25% on Mexico and Canada will cause inflation and job losses in both countries.

“To one tariff will come another and so on, until we put our common businesses at risk,” Sheinbaum said at a press conference on Tuesday, Reuters reported.

She said she would send the letter later in the day to the US president-elect urging dialogue and cooperation following his announcement on Monday.

Sheinbaum added that her administration had always shown Mexico’s willingness to help fight the fentanyl epidemic in the US and that apprehensions of migrants at the border were down and that migrant caravans were no longer arriving at the shared border.

Criminal gangs in Mexico were still receiving guns in the US, she said, adding that the region’s shared challenges required cooperation, dialogue and reciprocal understanding.

“We do not produce weapons, we do not consume the synthetic drugs. Unfortunately we have the people who are being killed by crime that is responding to the demand in your country,” she said.

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Updated at 09.22 EST

Germany’s economy minister, Robert Habeck, has warned that Europe must prepare for Donald Trump to impose hefty tariffs on its exports and stick together to combat any such measures.

“We have to be prepared for the fact that something similar could also happen to Europe or Germany,” Habeck told a business conference in Berlin on Tuesday, AFP reported.

Trump’s tariffs announcement on Monday indicates that his previous campaign threats to hit goods from across the world with higher tariffs should be taken seriously, he said.

“The EU must react to this in a united manner (and) speak together as Europe,” he said, adding that EU leaders should seek dialogue before considering retaliatory measures.

“It must be made clear that in the end everyone loses” from tariffs, including the US, he said.

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China tells US not to take ‘goodwill’ for granted on narcotics fight

A spokesperson for China’s foreign ministry said that the US should not “take China’s goodwill for granted” in counternarcotics cooperation and that “fentanyl is an issue for the US”.

The spokesperson was responding to US president-elect Donald Trump’s statement that he would be imposing tariffs of 10% on Chinese imports as a punishment for “massive amounts of drugs, in particular Fentanyl, being sent into the United States” from China.

In 2019, at the behest of the US, China scheduled all forms of fentanyl, the only major country to do so on a permanent basis.

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Updated at 09.01 EST

Donald Trump’s planned tariffs on all products coming into the US from Canada, Mexico and China would have serious implications for American industries, the New York Times writes.

Affected industries would include auto manufacturers, farmers and food packagers, which busily ship parts, materials and finished goods across US borders, the paper writes.

Mexico, China and Canada together account for more than a third of the goods and services imported and exported by the US, supporting tens of millions of American jobs.

The costs could be particularly high for the industries that depend on the tightly integrated North American market, which has been knit together by a free-trade agreement for over three decades … That, in turn, could cause spiking prices and shortages for consumers in the United States and elsewhere, in addition to bankruptcies and job losses.

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Scott Bessent, Donald Trump’s pick for treasury secretary in his upcoming administration, would be one of several officials responsible for imposing tariffs on other countries.

Bessent has on several occasions said tariffs are a means of negotiation, according to Associated Press. In a Fox News op-ed last week, he wrote that tariffs are “a useful tool for achieving the president’s foreign policy objectives”.

“Whether it is getting allies to spend more on their own defense, opening foreign markets to US exports, securing cooperation on ending illegal immigration and interdicting fentanyl trafficking, or deterring military aggression, tariffs can play a central role.”

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Updated at 08.30 EST

Analysis: what would US trade tariffs mean for Canada?

The imposition of 25% tariffs on Canada, particularly if they come suddenly, would be shattering to the Canadian economy, writes Chris Michael.

More than three-quarters of all of Canada’s exports go to the US – almost $600bn worth – including energy, lumber and auto parts. Successive decades of free trade have knitted the two countries together more or less seamlessly.

Canada would also likely retaliate, imposing tariffs of its own on US goods, driving up the cost of imported American items. Making matters worse for Canadians would be if the Canadian dollar falls as a result – and it has already taken an immediate hit, dropping about 1 cent against the US dollar following Trump’s announcement.

A 25% tariff on all goods would set off by far the largest trade war between the two allies – dwarfing the last one he started. In 2018, the first time Trump was president, he imposed tariffs on steel and aluminium, before eventually relenting about a year later. Those tariffs pitted the US against all its major trading partners including the EU, China, Canada and Mexico.

Trump has often attacked Canada’s own protectionist policies, including calling Canadian quotas in the dairy industry a “disgrace” and blaming it for widespread hardship among US farmers – even though the American problem has been persistent overproduction that leads US farms to dump tens of millions of gallons of surplus milk.

In his first term, he pushed to renegotiate Nafta – the North American Free Trade Agreement – which many voters in the Rust belt states he won in 2016 blamed for gutting their manufacturing economies and sending factory jobs to Mexico and Canada. The three countries agreed on some substantial tweaks, and renamed the treaty the United States Mexico Canada Agreement (USMCA).

That deal itself now looks to be in tatters.

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Updated at 08.16 EST

Quebec’s premier, François Legault, says Canada must do “everything possible” to avoid Donald Trump imposing a tariff of 25% on Canadian products.

In a post on X, he said the move by Trump “poses an enormous risk to the Quebec and Canadian economies”.

He calls for border integrity to be a federal government priority.

Earlier, Ontario’s premier, Doug Ford, said tariffs would be “devastating” to workers and jobs in the US and Canada.

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Updated at 08.16 EST

Two-thirds of Americans think Donald Trump’s tariff plans will only add to rising costs if implemented, and many are planning purchases ahead of his inauguration anticipating higher prices, according to a Harris poll conducted exclusively for the Guardian.

Trump has called tariffs the most “beautiful word in the dictionary”, yet about 69% of Americans think tariffs on imports will lead to higher prices, according to the poll.

The majority of Democrats (79%), independents (68%) and Republicans (59%) all believe that tariffs will increase the prices of the goods they pay for in the US. Nearly the same percentage of respondents said that tariffs will have a significant effect on what they can afford.

The Harris poll raises questions about the popularity of one of Trump’s key economic policy platforms. During his presidential campaign, Donald Trump called for a broad 20% tariff on all foreign imports and a 60% tariff on Chinese imports.

Read the full story here:

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