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US President-elect Donald Trump said Monday he intends to impose sweeping tariffs on goods from Mexico, Canada and China in response to illegal drug trade and immigration.
In a series of posts to his Truth Social account, Trump vowed to hit some of the United States’ largest trading partners with duties on all goods entering the country.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 per cent tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he wrote.
While in the White House, Trump launched an all-out trade war with China, imposing significant tariffs on hundreds of billions of dollars of Chinese goods.
At the time he cited unfair trade practices, intellectual property theft, and the trade deficit as justifications.
China responded with retaliatory tariffs on American products, particularly affecting US farmers.
The US, Mexico and Canada are tied to a three-decade-old free trade agreement, now called the USMCA, that was renegotiated under Trump after he complained that the US businesses, especially automakers, were losing out.
After Trump’s announcement Monday, Canada said it was “essential” to US energy supplies, and insisted the relationship between the two North American countries was “balanced and mutually beneficial, particularly for American workers.”
“We will of course continue to discuss these issues with the incoming administration,” said the joint statement from Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.
“Mexico and Canada remain heavily dependent on the US market so their ability to walk away from President-elect Trump’s threats remains limited,” Wendy Cutler, vice president at the Asia Society Policy Institute, and former US trade official, told AFP.
Many economists have warned that tariffs would hurt growth and push up inflation, since they are primarily paid by importers bringing the goods into the US, who often pass those costs on to consumers.
But those in Trump’s inner circle have insisted that the tariffs are a useful bargaining chip for the US to push its trading partners to agree to more favourable terms, and to bring back manufacturing jobs from overseas.
Trump has said he will put his commerce secretary designate Howard Lutnick, a China hawk, in charge of trade policy.
Lutnick has expressed support for a tariff level of 60 per cent on Chinese goods alongside a 10 per cent tariff on all other imports.
William Reinsch, senior adviser at the Centre for Strategic and International Studies, said that that move was classic Trump: “threaten, and then negotiate.”
“In terms of what might actually happen, I’d bet on some China tariffs going into effect. That’s legally easier and politically more palatable,” he said.
“On Canada and Mexico there was going to be a renegotiation of their trade deal (the USMCA) anyway in 2026.”
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