United States President-elect Donald Trump has promised to hit China, Mexico and Canada with new tariffs from the first day of assumption into his presidency to force them to crack down on illegal immigration and drug smuggling into the country.
Trump revealed that he would sign an Executive Order imposing a 25% tariff on all goods coming from Mexico and Canada, after being inaugurated on 20 January 2025.
A tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import. So a car imported to the US with a value of $50,000 subject to a 25% tariff, would face a $12,500 charge.
“We will be charging China an additional 10% tariff, above any additional tariffs” until it cracked down on fentanyl smuggling,” Trump said.
Trump said in a post on his Truth Social platform that the tariffs on Mexico and Canada will remain in place until the two countries clamp down on drugs, particularly fentanyl, and migrants illegally crossing the border.
“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem,” he wrote. “It is time for them to pay a very big price!”
The threat by Trump could mark a major escalation in tensions with the US’s three top trading partners.
It could also lead to higher prices for Americans since tariffs work as a form of tax on imports.
The United Stated is the world’s largest importer.
China, Mexico and Canada account for about 40 percent of the $3.2tn (£2.6tn) of goods it imports each year, according to official data.
China has defended its efforts to stop the flow of illegal drugs and has warned that there can be no winner in a trade war between the two.
After Trump made his tariff threat, he discussed trade and border security with Canada’s Prime Minister Justin Trudeau, according to a Canadian source who spoke to Reuters.
They had a “good discussion”, the source said.
Mexico’s finance ministry said, “Mexico is the United States’ top trade partner, and the USMCA provides a framework of certainty for national and international investors.”
In a follow-up post, Trump attacked Beijing for failing to follow through on promises that he said Chinese officials made to carry out the death penalty for people caught dealing in fentanyl, a synthetic opioid.
A spokesperson for the Chinese embassy in Washington told the BBC, “The idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality.
“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.”
The Biden administration has been calling on Beijing to do more to stop the production of ingredients used in fentanyl, which Washington estimates killed almost 75,000 Americans last year.
During his election campaign, Trump threatened Mexico and China with tariffs of up to 100%, if he deemed them necessary, much higher than those he put in place during his first term in office.
Trump has also said he will end China’s most-favoured-nation trading status with the US – the most advantageous terms Washington offers on tariffs and other restrictions.
