US president-elect Donald Trump has promised 25% tariffs on imports to the US from Mexico and Canada on the first day of his new administration.
Posting on Truth Social, his social media platform, Trump said that the motivation for new tariffs on Mexico and Canada was related to the US’ border security. He wrote:
“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before.
“On 20 January, 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 [US], and its ridiculous open borders.”
Trump will be inaugurated as US president on 20 January.
The increased tariffs would remain in place, he said, until drugs like fentanyl were stopped at the border, as well as halts to the flows of “all illegal aliens” from entering the US.
The president-elect argued that both countries “have the absolute right and power to easily solve this long-simmering problem”, adding that until they do so “it is a time for them to pay a very big price”.
China rates
Trump also raised fentanyl in justifying his plans for tariff increases on China, which will be at a rate of 35%.
“Representatives of China,” he argued, had promised to “institute their maximum penalty, that of death”, for those illegally exporting fentanyl to the US. As “they never followed through”, he has pledged an additional 10% tariff “above any additional tariffs” on all Chinese goods entering the US.
During his time in office, incumbent president Joe Biden worked with China to reduce the spread of fentanyl, which reportedly causes over 70,000 deaths in the US a year and is one of the biggest killers of Americans between the ages of 18 and 49.
China has responded to the statement, with state-run media outlets calling it “irresponsible” while vice president Han Zheng said that “economic globalisation is an irreversible historical trend”.
“China believes that China-US economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a tariff war,” a representative from China’s Washington DC embassy said.
Campaign pledges
While campaigning for the presidency, Trump had targeted the issue of Chinese-made cars entering the US through Mexico to dodge tariffs by saying that he would set “whatever tariffs are required — 100%, 200%, 1,000%” to solve the problem.
Ricardo Monreal, a congressman from Mexico’s ruling Morena party, said that the tariffs would “not solve the underlying issue” at the border between the two countries, adding in a post on X that “escalating trade retaliation would only hurt people’s pockets”.
Earlier in November, Mexican economic minister Marcelo Ebrard told Radio Fórmula that, while he was “optimistic” that he could work with Trump, Mexico City might be forced to respond to any major tariff hike with its own tariffs.
Cost increases
Speaking to the FT, meanwhile, a senior economist at the Washington-based think tank the Tax Foundation, Erica York, said that “stiff new tariffs on imports from the US’s three largest trading partners would significantly increase costs and disrupt business across all economies involved”.
Trump has been undeterred by suggestions that the measures will be inflationary, however, stating to voters that the tariffs were "not going to be a cost to you, it’s a cost to another country".
He has also promised to remove China’s most-favoured nation status on tariffs and trade in the US.
