Trump proposes new tariffs on Mexico, Canada, and China

He said these tariffs aim to tackle problems like illegal border crossings, drug trafficking, and unfair trade practices.

Trump pledged to impose a 25% tariff on goods from Mexico and Canada starting on his first day in office. He added that the measures would stay in place until illegal immigration and drug smuggling are stopped.

“Both Mexico and Canada have the power to fix this problem,” Trump stated on Truth Social, his social media platform. “Until they act, they must pay the price!”

The president-elect also plans a 10% additional tariff on Chinese products. He said this would remain until China takes stronger action to stop fentanyl smuggling into the United States.

Trump’s announcement caused immediate ripples in the international markets. Currencies like the Canadian dollar, Mexican peso, and even the euro fell against the US dollar.

China’s Embassy in Washington responded, saying, “No one wins in a trade war.” Spokesperson Liu Pengyu emphasized the benefits of mutual trade between the two nations.

Canada’s national broadcaster called Trump’s remarks “his most serious threat against Canada in years.” Catherine McKenna, a former Canadian minister, expressed concern, noting the challenges Canada faced during Trump’s earlier presidency.

Economists warn that Trump’s proposed tariffs could disrupt the US-Mexico-Canada Agreement (USMCA). This trade deal, signed by Trump himself, replaced the earlier North American Free Trade Agreement (NAFTA).

Tim Harcourt, an economist at the University of Technology Sydney, said the tariffs might end the free trade agreement entirely. “It looks like this could stop trade in non-drug-related goods too,” he explained.

Supporters of Trump believe these tariffs could bring manufacturing jobs back to the US. They also think the move could pressure other countries into agreeing to better trade deals.

However, many experts argue that broad tariffs would hurt the US economy. Everyday goods might become more expensive, and global economic growth could slow.

Trump has a history of making strong tariff threats during his campaigns. While some were implemented, others were not. For example, during this campaign, he suggested tariffs as high as 60% on Chinese imports and even 1,000% on vehicles from Mexico.

Trump also accused China of failing to punish drug dealers smuggling fentanyl. He said China had promised to enforce strict penalties but did not follow through.

“Drugs are entering our country at record levels, mainly through Mexico,” Trump claimed.

Fentanyl, a dangerous drug, has been a major issue in the US. Trump’s team suggests that high tariffs could act as a deterrent for countries involved in its smuggling.

Scott Bessent, Trump’s pick for Treasury Secretary, called tariffs a “useful tool” for negotiating with other countries. But many worry about the broader impact on trade and prices in the US.

In 2022, Mexico, Canada, and China accounted for over $2 trillion in combined trade with the US. These three nations are America’s largest trading partners.