Trump threatened to impose 25% tariffs on Canada and Mexico and 10% on China as soon as he gets into office on January 20, 2025. He accused the countries of permitting the flow of illegal migrants and drugs, particularly fentanyl, into the US.
“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump wrote in a post uploaded to his social media platform Truth Social.
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In a second post, he accused China of not doing enough to halt the flow of fentanyl into the US. “Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their products coming into the United States of America,” he added.
Many drug cartels use ingredients from China to manufacture fentanyl, a drug fueling an opioid crisis in America which is estimated to have killed 75,000 in the country last year.
“The idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality,” a spokesperson for the Chinese embassy in the US posted on X. He added China was not interested in a trade war.
Trump claims that import tariffs will not cost American consumers. Rather, he claims they will compel foreign companies to set up manufacturing plants in the US boosting jobs and lowering costs.
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By GlobalDataMost economists see these claims as misleading, saying it’s more likely consumers would pay those extra costs. The tariffs could dramatically increase inflation, a top issue for voters in the election.
After a tense contest for Treasury Secretary, Trump appointed Scott Bessent last week. Bessent was Wall Street’s preferred choice, as he had made comments in the past suggesting he would use tariffs as a negotiating tactic rather than impose them blanketly as Trump said he would.
In an interview with the Financial Times before securing the nomination, Bessent said he believed Trump was a “free trader” and the strategy with tariffs would be “escalate to de-escalate.”
The tariffs, which Trump said he would impose through an executive order, would break the terms of the United States-Mexico-Canada Agreement (USMCA), the free trade deal that replaced NAFTA during his first term.
Mexico and Canada are the US’s top two trading partners. In 2023, 80% of exports from Mexico and 75% from Canada went to the US.
The posts come as Canadian officials floated the possibility of excluding Mexico from the USMCA and creating a bilateral trade agreement with the US. Top officials have expressed worries over Chinese investment in Mexico, alleging companies are circumventing EV trade restrictions.
