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Donald Trump has said he will levy tariffs of 25 per cent on all US imports from Canada and Mexico, and an extra 10 per cent tariff on Chinese goods, in retaliation for illegal immigration and drug trafficking.
In a post on his social media site, Truth Social, Trump said he would impose the Canada and Mexico tariffs “on ALL products coming into the United States, and its ridiculous open borders”, which would remain in place “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country”.
Trump said the tariffs on China would be on all products, on top of existing levies, and criticised Beijing for failing to follow through on promises to carry out the death penalty for people dealing fentanyl, a deadly synthetic opioid.
The announcements serve as opening shots in Trump’s confrontational new trade policy, following a sweeping electoral victory in which he campaigned on broad tariffs and lambasted America’s trading partners.
The US dollar jumped higher after the news, pressing other currencies. The Canadian dollar fell more than 1 per cent and the Mexican peso was off as much as 2 per cent, adding to a sharp depreciation this year.
The Korean won and Australian dollar both declined 0.6 per cent against the greenback. The offshore renminbi slipped 0.3 per cent to Rmb7.27 a dollar. The euro weakened 0.4 per cent and the pound edged down 0.3 per cent.
Mexico, which is the US’s top trade partner, has faced threats of tariffs from Trump, who on the campaign trail said he would impose “whatever tariffs are required — 100 per cent, 200 per cent, 1,000 per cent” to stop Chinese cars from crossing into the US from Mexico.
Trump has warned Mexico’s President Claudia Sheinbaum he would levy tariffs of 25 per cent if she does not stop the “onslaught of criminals and drugs” crossing the border into the US.
The levies could be imposed using executive powers that would override the USMCA, the free trade agreement that he inked with the US’s southern neighbour and Canada during his first term.
Ahead of the US election, Sheinbaum tried to reassure Mexicans that they had nothing to worry about, saying she was “convinced” there was going to be a good relationship with the country that purchases three-quarters of its exports.
Trump has put a promise of tariffs at the centre of his economic vision and told voters he wanted big increases on all products coming into the US, with a particular focus on China.
However, Joe Biden’s administration has also increased tariffs on Chinese imports. In May, it sharply increased levies on a range of imported clean energy technologies, including boosting tariffs on electric vehicles from China to 100 per cent.
Biden’s administration has also been pressing Beijing for several years to crack down on the production of ingredients used in fentanyl, which it estimates claimed the lives of almost 75,000 Americans in 2023.
China this summer agreed to impose controls on chemicals crucial to manufacturing fentanyl following meetings between senior US officials and Chinese officials in Washington.
Additional reporting by William Sandlund and Christine Murray