Trump Declares War: 25% Tariff on China, Canada, and Mexico by 2025

US President-elect Donald Trump has announced that he will impose high tariffs on Canada, Mexico and China once he takes office. Trump plans to impose 25 percent tariffs on Canadian and Mexican goods and end the open border policy immediately after he is sworn in on Jan. 20, 2025. In addition, he has proposed an additional 10% tariff on Chinese goods. Trump has accused China of failing to stem the flow of drugs into the United States and has threatened to raise taxes until the drug problem is solved.

Liu Pengyu, spokesman for the Chinese Embassy in the United States, responded that Sino-US economic and trade cooperation is mutually beneficial, and a trade war and tariff war will not benefit either side. He stressed that the anti-drug departments of China and the United States have resumed communication, and China has responded to the anti-drug requests made by the United States. Trump has previously advocated revoking China's most-favored-nation status and proposed imposing tariffs of more than 60 percent on Chinese goods during the campaign.

Mexico and Canada are highly dependent on the U.S. market, and the new tariffs could have an impact on overseas companies that rely on Mexico as a production base. Trump's new tariff plan violates the terms of the United States-Mexico-Canada Agreement (USMCA), which exempts most trade between the three countries from tariffs. Mr Trump had planned to impose flat tariffs of 10 to 20 per cent on all imports, particularly tariffs of up to 200 per cent on cars entering the US at the US-Mexico border.

Mexico's finance Ministry responded to Trump's tariffs by stressing that the USMCA provides a framework of certainty for investors. Economists have warned that Trump's tariff plan could lead to a return to 1930s import rates, triggering inflation, a collapse in Sino-US trade and retaliation for various sanctions that could completely restructure supply chains. The cost of tariffs is ultimately borne by consumers or companies, resulting in higher costs or reduced profits.

Reinsch, a senior adviser at the Center for Strategic and International Studies, believes that Trump's tariff threat is a typical "threaten first, talk later" strategy. He predicted that some tariffs against China could be implemented because it would be relatively easy, both legally and politically.