Trump threatens Mexico and Canada with 25% tariffs from day one usa elections

With about two months left until he is sworn in as President of the United States, Donald Trump is already using tariffs as a threat. Through his social network, Truth, he has threatened Mexico, Canada and China if they do not end drug trafficking from those countries, especially fentanyl, and its entry into the United States. But will impose additional tax. The additional tariffs to be imposed from Trump’s first day in the White House will be 25% for Mexico and Canada and 10% for China. He says that if irregular immigration is not stopped, it will continue in the case of two North American countries as well.

Thus, the President-elect, even before taking office, resumes his habit of governing by tweet, in this case threatening the United States’ three main trading partners. This is a warning devoid of nuance. This will continue until “all” undocumented immigrants stop their “invasion.” Apparently, this is an Ordago, an exaggeration of the purest Trumpist style.

Trump has given his threats in two separate messages. Regarding Mexico and Canada he says: “As everyone knows, thousands of people are crossing to Mexico and Canada, driving crime and drugs to levels never seen before. At this moment, a caravan coming from Mexico, consisting of thousands of people, appears unstoppable in its attempt to cross our currently open border. On January 20, as one of my many first executive orders, I will sign all necessary documents to allow Mexico and Canada to impose a 25% tariff on all products entering the United States and their ridiculously open borders. This tariff will remain in effect until drugs, especially fentanyl, and all illegal aliens stop this invasion of our country! Both Mexico and Canada have the full authority and power to easily resolve this long standing problem. We demand that you use this power, and unless you do, it is time for you to pay a very high price!”

Additionally, he wrote another message referring to China: “I have had several conversations with China regarding the large quantities of drugs being shipped to the United States, especially fentanyl, but to no avail. Representatives of China told me that they would impose maximum penalties, the death penalty, on any drug smuggler caught doing this, but, unfortunately, they never did, and the drugs continue to enter our country, primarily from Mexico. Through, never seen before. Until they stop doing so, we will charge an additional 10% tariff on top of any other tariff on all of their products entering the United States from China. Thank you for your attention to this matter.”

Trump’s messages have led to a higher reaction in the dollar. Tariffs are thought to cause adjustments in the real terms of trade that cause the currencies of countries exporting goods to the United States to weaken against that country’s currency. The dollar was falling this Monday following the appointment of Scott Besant as the incoming Treasury Secretary, which investors consider appropriate and moderate.

However, Trump has made it clear with his messaging who is in charge and who moves the markets. The president-elect entered the election with a protectionist proposal on trade matters, but he also wants to make import tariffs a pressure tool for his foreign policy and bilateral relations, as these messages show.

Declared import taxes are in addition to the normally levied taxes. Trump has been releasing statistics here and there, without making any overly clear proposals, that allow us to know what he and his economic team have in mind.

The President-elect proposed imposing reciprocating tariffs on American imports equal to (usually higher) the rates that trading partners impose on American exports. This would be added to (or overlapped) by a universal basic tariff of 10% to 20% on all imports. As for China, Trump has promised 60% tariffs on all imports. Furthermore, he has assured that he will impose 100% tariffs on cars imported from Mexico.

The short-term effect of the tariffs is to increase prices, thus fueling the inflationary tensions that Trump promised to control. Furthermore, it may have an impact on production chains (especially automobile chains) and supply chains, causing distortions in the functioning of the economy. The expectation that tariffs will be imposed already influences the actions of economic agents, who try to anticipate supplies or seek alternative suppliers.

Furthermore, widespread imposition of tariffs could lead to retaliation and, ultimately, a trade war that the global economy loses. Imposing these tariffs on Mexico and Canada would represent a flagrant violation of the treaty signed by the three North American countries during Trump’s presidency in 2020, which replaced the 1994 free trade agreement, precisely at the request of the then-President of the United States. The current treaty includes a clause requiring it to be reviewed in 2026. Washington wants to take advantage of this review so that Mexico no longer remains a gateway for Chinese products to enter the United States.