The president-electIn an attempt to combat illegal immigration and drug use, Donald Trump promised to levy broad new tariffs on China, Canada, and Mexico as soon as he takes office. One of his first executive orders, he added, would be to levy a 25% tax on all goods coming into the country from Canada and Mexico, and an additional 10% tariff on items coming from China.
If the tariffs are put into effect, American consumers may see a sharp increase in the cost of everything from cars to gas to agricultural goods. According to the most recent U.S. Census data, the United States is the world’s greatest importer of products, with Mexico, China, and Canada ranking as its top three suppliers.
Despite the fact that southern border apprehensions have been close to four-year lows, Trump made the threats Monday in two tweets on his Truth Social website in which he lashed out against an inflow of illegal migrants.
“As one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States on January 20th, and its ridiculous Open Borders,” he wrote, lamenting that, despite violent crime declining from pandemic highs, thousands of people are flooding through Mexico and Canada, bringing with them drugs and crime at unprecedented levels.
He declared that until drugs, especially fentanyl, and all illegal aliens halt their invasion of our country, the additional tariffs would stay in effect.
Canada and Mexico both have the right and ability to quickly resolve this long-simmering issue. He said, “We hereby demand that they use this power, and until they do, it is time for them to pay a very large price!”
According to a top Canadian government official, Trump and Prime Minister Justin Trudeau had a conversation following Trump’s posts. According to the official, the two had a nice talk and discussed commerce and the border. The official spoke on condition of anonymity because they were not permitted to discuss the issue in public.
Trump also took aim at China, claiming that he has discussed the enormous amounts of drugs, especially fentanyl, being delivered into the US with China on numerous occasions but to no purpose.
He wrote, “We will be imposing an additional 10% tariff, on top of any other tariffs, on all of China’s numerous products entering the United States of America until they cease.”
There would be losers on both sides of a trade war, the Chinese Embassy in Washington said Monday.
China-US commercial and economic cooperation is mutually beneficial, according to a post on X by embassy spokesperson Liu Pengyu. In a #tariffwar or a trade war, nobody will prevail. China has taken action to combat drug trafficking in the past year, he noted.
Before he returns to the White House in the new year, it is unclear if Trump will follow through on the threats or if he is merely using them as a negotiation tool.
Scott Bessent, Trump’s nomination for Treasury Secretary, has stated repeatedly that tariffs are a tool for negotiation. If approved, Bessent would be among the individuals in charge of placing tariffs on foreign nations.
Prior to his nomination, he stated in an opinion piece on Fox News last week that tariffs are a helpful instrument for accomplishing the president’s foreign policy goals. Tariffs can play a key role in securing cooperation on stopping illegal immigration and interdicting fentanyl trafficking, opening foreign markets to U.S. goods, encouraging allies to increase their defense spending, or discouraging military aggressiveness.
Voters’ annoyance with inflation helped Trump win the election, but his planned tariffs run the risk of making food, cars, and other items even more expensive. The Federal Reserve may need to maintain higher benchmark interest rates if inflationary pressures worsen.
Trump’s threats coincide with a decline in arrests for illegally entering the country from Mexico. According to the most recent U.S. statistics, the U.S. Border Patrol made 56,530 arrests in October, which is less than one-third of the total from the same month the previous year. These arrests are still close to four-year lows.
In the meantime, throughout the last two years, there has been an increase in arrests for unlawfully entering the country from Canada. Between October 2023 and September 2024, the Border Patrol made 23,721 arrests, up from 10,021 during the preceding 12 months. Over 14,000 people were arrested on the Canadian border, which is more than ten times as many as they were two years prior.
For their roles in an international operation that resulted in the deaths of a family of Indian migrants who froze while attempting to cross the Canada-U.S. border during a 2022 blizzard, a jury last week found two men guilty on charges of human smuggling.
Mexico is the source of a large portion of the fentanyl in America. Under President Joe Biden, border seizures of the drug increased significantly. In the 2024 government budget year, U.S. officials reported that they had recovered around 21,900 pounds (12,247 kilograms) of fentanyl, up from 2,545 pounds (1,154 kilograms) under the Trump administration.
The economies of Canada and Mexico, in particular, would face severe difficulties if Trump were to implement the promised tariffs.
In the immediate aftermath of Trump’s post, the Canadian dollar experienced a significant decline in value on international exchange markets.
Reports that Trump was considering imposing a 25% tariff on the Canadian auto industry and his attempt to renegotiate the North American Free Trade Agreement, or NAFTA, were viewed as existential threats in Canada during his first term. 75% of Canada’s exports go to the United States, making it one of the most trade-dependent nations in the world.
The duties would also cast doubt on the validity of the USMCA, a trade agreement with Canada and Mexico negotiated by Trump in 2020 that replaced NAFTA and is set to be reviewed in 2026.
Although the 2020 agreement permits national security exceptions, it is unclear from Trump’s social media post how he would lawfully impose tariff increases on those two crucial U.S. trading partners.
Questions regarding what power he would use, what he would need to see to stop the tariffs from going into effect, and how they would affect U.S. pricing were not immediately answered by Trump transition team representatives.
Other nations retaliated with their own tariffs in response to Trump’s higher tariffs during his first term in office. For example, in response to additional levies on Canadian steel and aluminum, Canada declared billions of dollars in new duties against the United States in 2018.
The selection of many American goods was based more on their political than on their economic significance. For instance, only $3 million worth of yogurt is imported into Canada each year from the United States, with the majority coming from a single plant in Wisconsin, the home state of Paul Ryan, the Republican speaker of the House at the time. A 10% tariff was applied to that commodity.
In a joint statement from Public Safety Minister Dominic Leblanc and Deputy Prime Minister Chrystia Freeland, the Canadian government highlighted the two nations’ close relationship and stated that they will talk with the incoming administration about the border and their extensive commercial links.
The integrity of our shared border and border security are of utmost importance to Canada. The statement said, “Our relationship today is balanced and mutually beneficial, especially for American workers.”
Freeland has stated that the president-elect’s pledge to begin a mass deportation and the worry that it would result in a flood of migrants to Canada are the committee’s main concerns. Freeland chairs a special Cabinet committee on Canada-U.S. ties to address worries about another Trump presidency.
Prior to Trump’s posts, a second senior Canadian official stated that Canadian officials anticipated that he would issue executive orders on trade and the border as soon as he took office. The official spoke on condition of anonymity and was not permitted to speak in public.
Additionally, Mexico’s Departments of Foreign Relations and Economy did not immediately respond to Trump’s remarks. Typically, the president addresses such important matters during her morning press conferences.
A top Chinese commerce official stated last week that increasing taxes on Chinese exports will result in higher consumer prices. Wang Shouwen, the vice minister of commerce, added that China is able to control the effects of these outside shocks.
— Rob Gillies and Jill Colvin, Associated Press
Contributors to this study included Didi Tang, Josh Boak, Fatima Hussein, Mark Stevenson, and Adriana Gomez Licon.
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