25% on everything – Trump plans high tariffs against Mexico and Canada

Trump explained the plan on the platform he co-founded, Truth Social. The US president-elect justified tariffs on goods from Canada and Mexico with immigrants bringing crime and drugs across those two borders into the US. Until this stops, the tariffs should remain in place.

Both Canada and Mexico have the power to solve the problem. “We are calling on them to use their power, and unless they do, it is time for them to pay a very high price,” Trump said.

Fentanyl as reason for tariff increases in China
Trump also justified the planned tariffs on Chinese goods by saying drugs such as deadly fentanyl were coming into the US from the country. Although China announced that it would take action against this, it did not. Current US President Joe Biden met Chinese head of state Xi Jinping more than a week ago on the sidelines of the Asia-Pacific Economic Community (APEC) summit in the Peruvian capital Lima. Xi had assured Biden that he also wanted to work with the future US government under Trump.

China warns of a trade war
Following the announcement, the Chinese embassy in Washington warned of a trade war between the world’s two largest economies. “No one will win a trade or tariff war,” Chinese embassy spokesman Liu Pengyu in Washington said Monday. “China believes that economic and trade cooperation between China and the US is inherently mutually beneficial.”

China defends itself against accusations
Liu also rejected Trump’s allegations that China deliberately allows drug-producing substances into the United States. China has taken steps to combat drug trafficking following an agreement between President Joe Biden and Chinese President Xi Jinping last year. Most recently, China announced in August that it would tighten controls on three chemicals essential to the production of fentanyl. “All this proves that China’s claim that China knowingly allows fentanyl precursors to enter the United States is completely inconsistent with the facts and reality,” Liu said.

Trump sought votes with tariff promises
Trump had already announced far-reaching tariffs during the election campaign. He argues that his tariff policy will lead to American companies producing more in the US again. That creates employment. It is the classic “America First” policy that the Republican pursued during his first term.

Democratic US President Biden has also relied on protectionism. He not only largely maintained Trump’s China tariffs, but also imposed new tariffs – for example on electric cars. While Biden focused relatively specifically on specific sectors, Trump’s announced tariffs are more far-reaching.

In the US there are fears of higher prices
Many experts fear that this insulation policy will lead to higher prices. Because many goods from abroad cannot be produced in the US overnight. Companies are therefore still dependent on imports from abroad for production. Import duties then increase the costs for these goods. Companies are expected to simply pass these costs on to consumers. Furthermore, countries hit by the tariffs are likely to respond with counter-tariffs, which in turn is bad for US companies that export heavily.

Trade disputes have defined Trump’s first term in office
Washington and Beijing have been embroiled in a trade dispute for years. Biden left in place the tariffs on China that Trump had imposed. The US also imposed economic sanctions and export restrictions to make it more difficult for Beijing to access American technologies. The Biden administration also introduced restrictions on US investments in China. Biden also initiated large-scale investments at home to make US supply chains more independent – ​​especially from China. However, both countries are closely linked economically.

Trump also imposed tariffs on certain products from Mexico and Canada, such as steel and aluminum, during his first term. He repeatedly argued with the two countries over tariffs and imposed several conditions to avoid punitive tariffs.