US President-elect Donald Trump on Monday vowed to impose major tariffs on three of the US’s biggest trading partners – Canada, Mexico and China – and wondered how he would fulfill a campaign promise that could spark a trade war. This was explained in detail.
President Donald Trump, who takes office on January 20, said he would impose a 25% tariff on imports from Canada and Mexico until they crack down on drugs, particularly fentanyl, and migrants crossing the border. -Trade agreements.
Separately, President Trump outlined “an additional 10% tariff that exceeds any additional tariffs” on imports from China. Although it was not entirely clear what this meant for China, as he had previously promised to abolish China’s most-favored-nation trading status and impose tariffs of more than 60% on imports from China. , which was much higher than the tariffs imposed during his first term.
The two posts on Truth Social are President Trump’s most concrete comments on how he will implement economic policy since winning the Nov. 5 election on a promise to “put America first.” Represents part of the comment.
“On January 20th, in one of my first of many executive orders, I would impose a 25% tariff on Mexico and Canada on all products imported into the United States, and their ridiculous opening of borders. I will sign all the necessary documents.”
The United States accounted for more than 83% of Mexico’s exports in 2023, and 75% of Canada’s exports.
The tariffs could also pose problems for foreign companies, including many Asian automakers and electronics makers, that use Mexico as a gateway for low-cost production to the U.S. market.
The new tariffs threatened by President Trump appear to violate the terms of the United States-Mexico-Canada Trade Agreement (USMCA). The agreement, signed by President Trump, went into effect in 2020 and continued near-duty-free trade between the three countries.
Canada and the United States imposed sanctions on each other’s products at one point during the hate-filled negotiations that eventually led to the USMCA. President Trump will have a chance to renegotiate the deal in 2026, when a “sunset” clause would force him to either withdraw from the deal or negotiate changes to it.
After issuing the tariff threat, Trump met with Canadian Prime Minister Justin Trudeau to discuss trade and border security, according to a Canadian source familiar with the situation.
“It was a good discussion. We plan to keep in touch in the future,” the source said.
William Reinsch, former chairman of the National Foreign Trade Council, said President Trump may be counting on the threat of tariffs to prompt an early renegotiation of USMCA.
“This feels more threatening to me than anything else,” Reinsch said. “I think the idea is that if you keep punching them in the face, eventually they will surrender.”
Ricardo Monreal, leader of Mexico’s House of Representatives and member of the ruling Morena party, called for “the use of bilateral institutional mechanisms to combat human, drug and arms trafficking.”
“Escalating trade retaliation will only hurt the people’s pockets and is far from solving the fundamental problem,” he said in a post on social media platform X.
During President Joe Biden’s term, migrant arrests reached records and strained U.S. border enforcement, but as Biden instituted new border restrictions and Mexico stepped up enforcement, illegal immigration has increased. has decreased dramatically this year.
In 2023, more than 83% of Mexico’s exports will go to the United States, and 75% of Canada’s exports will go to Mexico.
The new tariffs threatened by President Trump would violate the terms of the U.S.-Mexico-Canada trade agreement. The agreement signed by President Trump went into effect in 2020 and continued near-duty-free trade between the three countries.
President Trump’s announcement caused the dollar to rise. The dollar rose 1% against the Canadian dollar and 1.6% against the Mexican peso, while Asian stock markets fell and European stock exchanges also fell in early trading. S&P500 futures are little changed.
China: No one can win a trade war
Regarding China, President Trump accused China of not taking strong enough action to stop the flow of illegal drugs from Mexico into the United States.
“Until the tariffs are suspended, we will impose additional 10% tariffs on China, above and beyond any additional tariffs, on many Chinese products imported into the United States,” Trump said.
A spokesperson for the Chinese embassy in Washington said China believes that China-US economic and trade cooperation is mutually beneficial. “No one wins in a trade war or tariff war,” Liu Pengyu said.
The embassy also spoke about steps China has taken since the 2023 U.S.-China talks, in which the Chinese government agreed to block the export of items related to manufacturing the opioid fentanyl, a leading cause of drug overdoses in the United States. also mentioned.
“All of this proves that the idea that China knowingly allows fentanyl precursors to flow into the United States is completely contrary to facts and reality,” the spokesperson said.
China’s Foreign Ministry said in a statement that China intends to continue anti-drug cooperation with the United States on the basis of “equality, mutual benefit and mutual respect.”
“The US side should respect China’s goodwill and protect the sound status of hard-won cooperation on drug control between China and the US,” the ministry said.
Chinese Vice President Han Zheng spoke at the Supply Chain Expo in Beijing on Tuesday, saying that China will cooperate with other countries to build an open world economic system and maintain the stability of global industrial and supply chains. He said he was prepared to do so.
China’s economy is in a vulnerable position amid a long-term real estate recession, debt risks, and weak domestic demand.
In the run-up to the November 5 election, President Trump announced plans to impose blanket tariffs of 10% to 20% on virtually all imported goods. He also said he would impose tariffs of up to 200% on cars entering the U.S.-Mexico border.
“Mexico is the United States’ largest trading partner, and USMCA provides a framework of certainty for domestic and foreign investors,” Mexico’s Treasury Department said in a statement regarding President Trump’s tariff pledges.
Economists say President Trump’s overall tariff plan, perhaps his most important economic policy, will push U.S. import tariffs back to 1930s levels, triggering inflation, collapsing U.S.-China trade and prompting retaliation. The company said it would cause major reorganization of supply chains.
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(Additional reporting by Kylie Madley, Jasper Ward, David Lowder, Andrea Shalal, David Ljungren, Brendan O’Boyle, Joe Cash, Ethan Wang, Liz Lee; Stephen Coates, Edwina Gibbs, Mark・Edited by Potter)
