Citing illegal immigration and the drug trade, U.S. President-elect Donald Trump promised Monday a 25% tariff on all items from Canada and Mexico starting on his first day in office, along with an extra 10% duty on goods from China.
“On January 20th, 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, and its ridiculous Open Borders,” Trump said in a post on Truth Social.
Trump declared that the tariffs will be in effect until the two nations crack down on illicit border crossings and drugs, especially fentanyl.
The U.S.-Mexico-Canada Trade Agreement, which Trump signed into law and went into effect in 2020, and which maintained the primarily duty-free trade between the three nations, would seem to be violated by Trump’s projected additional tariff.
The two biggest trading partners of the United States are Mexico and Canada. In 2023, 75% of Canadian exports and over 83% of Mexican exports went to the United States.
During the bitter negotiations that resulted in the USMCA, Canada and the US once placed sanctions on each other’s goods.
The president-elect criticized China for failing to take decisive action to curb the flow of illegal drugs from Mexico into the United States.
“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.
Separate calls for comment from the Canadian foreign ministry, Justin Trudeau’s office, and the Chinese embassy in Washington were not immediately answered.
When Reuters reached out to Mexico’s economy and foreign ministries, they did not immediately respond.
Trump has previously promised to remove China’s preferential treatment in trade and put tariffs on Chinese goods of more than 60%, which are significantly higher than those he levied in his first term.
Due to the country’s protracted real estate slump, debt problems, and low domestic demand, the Chinese economy is currently in a far more precarious position.
Following Trump’s social media tweet, the dollar increased by more than 2% versus the Mexican peso and by 1% versus the Canadian dollar. New tabs for Japan’s Nikkei (.N225) tumbled 1%, while U.S. stock futures declined 0.3%.
Prior to the election on November 5, Trump proposed imposing 10%–20% blanket tariffs on almost all imports. Additionally, he declared that he would impose tariffs of up to 200% on any automobiles entering the United States from Mexico.
Additionally, he stated his intention to formally use the six-year review clause in the USMCA as soon as he assumes office. It is now anticipated to occur in July 2026.
According to economists, Trump’s entire tariff plans—likely his most significant economic policy—would force import tax rates in the United States back to levels seen in the 1930s, increase inflation, disrupt commerce between the United States and China, provoke retaliation, and fundamentally alter supply networks.
They claim that the businesses who import the goods that are subject to the duties pay the tariffs and either accept lower earnings or pass the costs on to customers.
Trump often talks about nations having to pay as a result of his tariff plan; on Monday, he said that Canada and Mexico would “pay a very big price.”
