Trump promises 25% tariffs on Mexico and Canada, an additional 10% tariff on China | Business and Economics

United States President-elect Donald Trump has promised to drop a 25 percent tariff on all goods from Mexico and Canada and an “extra” 10 percent tariff on Chinese goods because of illegal border crossings and drug smuggling.

Trump said on Monday that he would impose tariffs on Mexican and Canadian imports on the first day of his administration and that the measures would last until the “onset” of undocumented immigrants and drugs ends.

“Both Mexico and Canada have the absolute right and ability to easily resolve this ongoing crisis,” Trump said on his Truth Social media site.

“This is why we want them to use this power, and until that time they use it, it is time for them to pay a very heavy price!”

Trump said in a subsequent post that he would also impose a 10 percent tariff on China, “on top of any additional tariffs”, until the country takes action to stop fentanyl trafficking.

During his campaign, Trump promised to impose tariffs of 60 percent or more on Chinese goods and suggested that he would impose tariffs of 1,000 percent or more on cars from Mexico.

“The representatives of China told me that they would issue their maximum sentence, death, to any drug dealers caught doing this but, unfortunately, they did not follow through, and drugs are pouring into our country, especially Mexico, at unprecedented levels. before,” said Trump.

Trump's announcement caused an immediate backlash and further volatility in international markets, sending the Canadian dollar, Mexican peso, euro, British pound, Korean won and Australian dollar down against the US dollar.

A spokesman for the Chinese Embassy in Washington said “no one” will win a trade war between the two sides.

“Regarding the issue of US tariffs on China, China believes that China's economic and trade cooperation with the US is mutually beneficial,” its spokesman Liu Pengyu said in a statement.

The Canadian Broadcasting Corporation, Canada's national broadcaster, called the president-elect's comments “his most serious threat to Canada in years”.

“And that's how it starts,” said Catherine McKenna, Canada's former environment minister, in a post to Bluesky.

“The time and energy our government had to spend on Trump last time was in vain.

Trump's proposals could have a major impact on international trade and call into question the future of the US-Mexico-Canada Agreement he signed into law during his first term, although Republicans have made similar threats in the past without following through.

Trump's choice for Treasury Secretary, Scott Bessent, described tariffs as a “useful tool” to strengthen the president's hand with other countries.

Many economists have warned that Trump's sweeping tax proposals will raise the cost of everyday goods in the US and slow global growth.

Trump's supporters have argued that the tariffs will encourage the return of manufacturing jobs from abroad and give his administration greater power to extract favorable trade deals from other countries.

China, Mexico and Canada are the US's three largest trading partners.

The countries account for $830bn of US exports and $1.43bn of US exports, respectively, by 2022, according to the Office of the US Trade Representative.