Trump intends to hit Canada, Mexico and China with tariff, which specialists say will danger retaliation and a harmful economic war
Donald Trump’s threat to impose steep tariffs on goods imported into the United States has set the level for a bitter global trade battle, in keeping with trade experts and economists, with purchasers and enterprise’s warned to brace for steep costs.
The president-elect announced on Monday night that he intended to hit Canada, Mexico and China with tariffs on all their exports to the United States – till they reduce migration and the flow of drugs into the country.
As officials in the three countries scrambled to reply, Keith Rockwell, a former director on the World Trade Organization, predicted that Trump’s pass could spark a trade battle. “The United States exports hundreds of billions of dollars worth of goods to those countries,” he said. “Anyone who expects that they may stand pat and no longer retaliate has now not been paying attention.”
China right away counseled that each sides could lose from an escalation in economic tensions. “No one will win a trade war or a tariff war,” Liu Pengyu, a spokesperson on the Chinese embassy in Washington, wrote on X, formerly Twitter. Chrystia Freeland, Canada’s deputy high minister, and Dominic LeBlanc, its public protection minister, touted the country’s “balanced and mutually beneficial” economic ties with the USA.
Hours after Trump issued the announcement on Truth Social, his social media platform, economists at ING released studies that expected his broader campaign proposals on trade – which includes a universal tariff of between 10% and 20% on all goods imported from overseas, and a 60% tariff on all items from China – may want to price each US client up to $2,400 each year.
“This capacity growth in purchaser expenses and inflation could have widespread economic implications, in particularly in an economy wherein purchaser spending amounts for 70% of all activities,” James Knightley of ING said.
It is doubtful whether Trump, who has defined “tariff” as “the most beautiful word inside the dictionary”, will observe through on this plan. Tariffs – levies paid for by the enterprise uploading foreign goods – are not popular with voters, even Trump’s voters. A Harris ballot carried out for the Guardian observed 69% of people believe they may boom the expenses they pay.
And while he threatened universal tariffs while campaigning for the White House, this proposal – a 25% duty on all goods from Mexico and Canada, and a 10% duty on China, on top of exising duties – is extra targeted.
“Trump’s statements absolutely herald in the dawn of a new era of US trade protectionism that will sweep many US trading companions into its ambit,” said Eswar Prasad, former head of the IMF’s China division. “Such tariffs may have a disruptive effect on US as well as international trade, as countries around the world jockey to soften the blow of US tariffs on their own economies and try to find ways to evade the tariffs.”
On the campaign trail, Trump and his allies claimed such measures could assist support the US economy and “make America rich once more”. Many economists took different view, caution that sweeping tariffs might growth the price of goods for US consumers, and danger prompting different nations to retaliate, hitting US businesses exporting items to the world.
But in his announcements on Tuesday, Trump did not awareness on the economic benefits has claimed tariffs would bring. Instead, he blamed Mexico and Canada for “ridiculous Open Borders” he alleged have been prompting an immigration crisis, and China for “the large amounts of drugs, mainly Fentanyl” arriving inside the US – and pledged to impose tariffs on these countries until they addressed his concerns.
“Trump seemingly sees tariffs as a tool with broad uses tackling a whole of malign external factors that have negative consequences on the US economy, society and national security,” noted Prasad, now a professor of trade policy at Cornell University.
The billionaire hedge fund manager Bill Ackman, who endorsed Trump, wrote on X that the president-elect is “going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America”, in a bid to deliver on his “America First” policy strategy.
Making such announcements on social media “is a great way for Trump to effect foreign policy adjustments even before he takes office”, Ackman claimed.
As Trump builds out his broader trade strategy, Rockwell, previously of the WTO, stated a10% universal tariff would me “more workable” than 20%. “But if you raise it 20%, that creates a different dynamic,” he said. “You’re going to see lots, a much less demand for these products coming in.
“There will also be, with none doubt, retaliation,” he added. European officials “have got their list drawn up”, he stated. “It’s the most costly guarded mystery in Brussels, but it’s drawn up.” Countries will hit lower back with tariffs on “political pinch points”, Rockwell predicted. Under the last Trump administration, the European Union focused US exports which includes Harley-Davidson bikes, Levi’s denims and Kentucky bourbon.
