Trump Vows Wide-Scale Tariffs on Mexico, Canada & China
Trade tensions escalate as Beijing threatens, “We won’t see any winners in a trade war.”
A Bold Trade Agenda: The increase of 25% tariffs on goods from Mexico and Canada
The US President-elect Donald Trump, The Donald, has promised to introduce high tariffs into some of the major trading partners of the USA as part of his tough economic policy plans.
Trump in a thread on Truth Social said that he will sign an executive order to slap a 25% tariff on all Mexican and Canadian imports on the 20th of January since he became president.
China in the Crosshairs: 10% Tariff to Combat Fentanyl ‘Option’
He also proposed a 10% tariff on $200 billion worth of Chinese imports citing what he says is Beijing’s unwillingness to block the supply of fentanyl into the US. The move would be beyond any existing tariff that is already in place targeting China’s exports.
‘China believes that China-US economic and trade cooperation the cooperation between China and US is mutually advantageous,’ replied Liu Pengyu, spokesperson for China’s embassy in US pointing out that a trade war would be disadvantageous to all parties involved.
Canada and Mexico Push Back
Both Canada and Mexico laid most of their arguments on the positive impacts of trade relations with the US.
Canada’s Deputy Prime Minister Chrystia Freeland said that Canada is critical to US energy needs and will work with the incoming administration.
Mexico is poorly positioned to challenge Trump’s threats because a large amount of its exports go to the United States.
A Return to Protectionism: Implications of Trump’s First Term
His first regime was also characterized similarly by protectionism measures. He declared a trade war against China based on issues to do with the theft of intellectual property, imbalances of trade, and unfair competition. China fired back with equal tariffs which greatly affected American farmer.
His administration also reworked the NAFTA to the USMCA, solving his concerns about the giveaway to Mexican and Canadian industries.
Rich Measure of Economic Threats Foreseen
Many economists also warned that Trump’s tariff plans will lead to smaller economic growth as well as higher inflation. Usually it is importers who pay tariffs, while it is common practice that they transfer these additional costs to the consumers and possible raise prices.
“Mexico and Canada rely on the US market, hence their capacity to ignore threats from President-elect Trump is minimal,” said Wendy Cutler, who is a vice president of Asia Society Policy Institute.
Prospective Trade Averages In China
The new trade policies are expected to be led by Trump nominee for commerce secretary Howard Lutnick. We will revisit that in a moment but before that, Lutnick has suggested even more extreme measures such as a 60 percent tariff on Chinese imports and 10 percent tariff for all other imports.
William Reinsch, from the Center for Strategic and International Studies, said this was more of ‘bluster before bargaining’ and that, given the legal and political precedents, more tariffs on China are expected.
The Future of America’s Trade Policy
Canada, Mexico and the United States signed a new pact called United States-Mexico-Canada Agreement (USMCA) which is to replace NAFTA and can be renegotiate in 2026 which might give Trump another chance to alter the structure of the trade.
As the President-elect sharpens his protectionist agenda, the question remains: Does it possible for the US to ensure the balance between security and economic development as well as friendly relations with trade partners?
Watch out as these trade fights evolve, that transform the international relations system.