Trump pledges massive tariffs for Canada, Mexico, China
Donald Trump says he will impose tariffs on Canada, Mexico and China from the first day of his presidency – sparking fears of a global trade war.
The incoming US president announced late on Monday (local time) that he would impose 25 per cent tariffs on all Canadian and Mexican imports, and add another 10 per cent to all Chinese goods.
“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 said in a series of posts on his Truth Social platform.
“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 said the US’s neighbours and major trading partners could “easily solve this long simmering problem”.
He also confirmed China would face higher tariffs on its goods – by 10 per cent above any existing tariffs – until it prevented the flow of illegal drugs into the US.
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“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States – But to no avail,” he said in a post.
The US dollar rose against its major peers in the minutes after Trump’s announcement.
Stocks had been weak after strong gains globally in the previous session following fund manager Scott Bessent being nominated as US Treasury Secretary. He is considered by investors as a voice for Wall Street in Washington.
“It’s almost as if Trump wants to remind markets who is in control, after nominating Scott Bessent as Treasury Sec – a man markets expected to cool Trump’s potency,” City Index senior market analyst Matt Simpson said.
Bessent has said tariffs won’t add to US inflation if they are implemented correctly.
During the US election campaign, Trump promised repeatedly to implement tariffs between 10 and 20 per cent on all imported goods, and up to as much of 60 per cent on goods from China.
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In September, he also threatened agricultural equipment company John Deere with a 200 per cent tariff on imports if it moved production to Mexico as planned.
During the first Trump administration, however, a tariff-inspired trade war between Washington and Beijing ended with a deal that looked very different from the White House’s initial claims.
The Chinese economy is in a much more vulnerable position than during Trump’s first time, given its prolonged property downturn, debt risks and weak domestic demand.
University of Sydney United States Studies Centre research associate Georgia Edmonstone told The New Daily last month that Trump’s tariff policy could have many implications for Australia.
“There could be an impact on Australian exporters who sell into the US potentially,” Edmonstone said.
“In his previous administration, Trump also placed a small amount of tariffs on nearly all imports of steel and aluminium and on a significant number of products from China.
“What happened last time, a lot of the evidence shows, is that a lot of the increase in prices resulting from the tariffs fell on US consumers, rather than the exporters.”
During the first Trump White House, Australia was one of few countries that secured an exemption from Trump’s steel tariffs. It is expected the Albanese government will try to for a repeat of that.
In Canberra on Tuesday, China’s ambassador to Australia Xiao Qian said after Trump’s announcement that it was important for the two countries to “promote global trade”.
He said China and Australia should “continue the globalisation process, to safeguard the integrity of the global trading system”.
“I think the first and most for us to do perhaps is to continue the good relation on momentum between our two countries and see what we can do together to promote global trade instead of compromising our respective national interest and our common interest,” Xiao said.
Mexico’s foreign ministry and its economy ministry did not have an immediate comment when contacted by Reuters.
The Chinese embassy in Washington, the office of Canadian Prime Minister Justin Trudeau and the Canadian foreign ministry did not immediately respond to separate requests for comment.
