NEW YORK (AP) — The virtual president-elect of the United States, Donald Trump, threatened on Monday to impose new tariffs on Mexico, Canada, and China as soon as he takes office, as part of his plans to combat illegal immigration and drug trafficking. He said he would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China, as one of his first decrees.
If implemented, tariffs could drastically increase prices of everything in the United States, from gasoline and cars to agricultural products. The United States is the world's largest importer of goods, with Mexico, China, and Canada being its top three suppliers, according to the most recent data from the US Census.
Trump made the threats in a series of posts on his Truth Social social media platform, where he complained about the arrival of unauthorized migrants, even though border crossings at the southern border have remained close to their lowest level in the past four years.
"On January 20th, as one of my many first decrees, I will sign all the necessary documents to charge Mexico and Canada a 25% tariff on all products entering the United States, and their ridiculous open borders," he wrote, complaining that "thousands of people are crossing through Mexico and Canada, bringing crime and drugs to levels never seen before," even though violent crime has decreased since the peaks recorded during the pandemic."
He said that the new tariffs would remain in effect "until we stop this invasion of drugs, particularly fentanyl, and all illegal foreigners entering our country."
"Both Mexico and Canada have the absolute right and power to easily resolve this problem that has been simmering for a long time. Through this means, we demand that they use this power," he added, "and until they do, it is time for them to pay a very high price."
Trump also lashed out against China, stating that he has "had many conversations with China about the huge amounts of drugs, particularly fentanyl, being sent to the United States, but with no results."
"Until they stop, we will be charging China an additional tariff of 10%, on top of any additional tariffs, on all of their many products entering the United States of America," he wrote.
The Chinese embassy in Washington warned on Monday that there will be losers everywhere if there is a trade war.
"The economic and trade cooperation between China and the United States is mutually beneficial by nature," stated embassy spokesperson Liu Pengyu on the social network X. "No one will win a trade war or a tariff war." He added that China has taken measures in the past year to help stop drug trafficking.
It is not clear whether Trump will actually carry out the threats or if he is using them as a negotiating tactic before taking office in the new year.
Trump's nominee for Treasury Secretary, Scott Bessent—who, if confirmed, would be one of several officials responsible for imposing tariffs on other countries—has stated on several occasions that tariffs are a negotiating tool.
He wrote in an opinion article on Fox News last week, before his nomination, that tariffs are "a useful tool for achieving the president's foreign policy objectives. Whether to get allies to spend more on their own defense, open foreign markets to U.S. exports, ensure cooperation in ending illegal immigration and intercepting fentanyl trafficking, or deter military aggression, tariffs can play a central role."
Trump won the election largely due to voters' frustration with inflation, but the tariffs he threatens to impose could further increase prices of food, cars, and other goods. If inflationary pressures rise, the Federal Reserve may need to keep its benchmark interest rates high.
Trump's threats are known as arrests for illegally crossing the southern border have been decreasing. The figures for October show that detentions remain near their lowest level in four years. The Border Patrol reported 56,530 arrests in October, less than a third of last year's October total.
Meanwhile, arrests for illegally crossing the border from Canada have been increasing over the past two years. The Border Patrol made 23,721 arrests between October 2023 and September 2024, compared to 10,021 in the previous 12 months. More than 14,000 of those arrested at the Canadian border were Indians, over 10 times the number from two years ago.
Last week, a jury found two men guilty on charges related to human trafficking for their role in an international operation that led to the death of an Indian migrant family who froze while attempting to cross the border between Canada and the United States during a snowstorm in 2022.
Much of the fentanyl in the United States is smuggled from Mexico. Border seizures of the drug significantly increased during Joe Biden's presidency, with US officials tallying approximately 12,247 kilograms (21,900 pounds) of seized fentanyl in the fiscal year 2024, compared to 1,154 kilograms (2,545 pounds) in 2019 when Trump was president.
If Trump were to go ahead with the threat of tariffs, the new taxes would pose a huge challenge for the economies of Canada and Mexico, in particular.
The Canadian dollar weakened in the foreign exchange markets immediately after Trump's publication.
During Trump's first term, his decision to renegotiate the North American Free Trade Agreement (NAFTA) and reports that he was considering a 25% tariff on the Canadian automotive sector were seen as an existential threat in Canada. Canada is one of the most trade-dependent countries in the world, and 75% of Canada's exports, including automobiles, go to the United States.
Tariffs would also cast doubt on the reliability of the 2020 trade agreement negotiated largely by Trump, the USMCA, which replaced NAFTA and is scheduled for review in 2026.
It is not clear how Trump would legally apply tariff increases to these two key trading partners of the United States, but the 2020 agreement allows for national security exceptions.
Officials from the Trump transition team did not respond to questions at the moment about what authority would be used, what they would need to see to prevent the tariffs from being implemented, and how they would affect prices in the United States.
When Trump imposed higher tariffs during his first term, other countries responded with their own tariffs. Canada, for example, announced billions of dollars in new tariffs in 2018 in response to U.S. tariffs on Canadian steel and aluminum.
Many of the American products were chosen for their political impact rather than economic. For example, Canada only imports $3 million worth of yogurt from the United States annually, and most of it comes from a plant in Wisconsin, the home state of the then Speaker of the House, Paul Ryan, a Republican. That product was taxed with a 10% tariff.
The Canadian government, in a joint statement by Deputy Prime Minister Chrystia Freeland and Minister of Public Safety Dominic Leblanc, emphasized the close relationship between both countries and stated that they will discuss the border and extensive economic ties with the incoming administration.
"Canada gives top priority to border security and the integrity of our shared border. Our relationship today is balanced and mutually beneficial, especially for American workers," reads the statement.
Freeland, who chairs a special cabinet committee on Canada-US relations to address concerns about another Trump presidency, has said that the president-elect's promise to launch a massive deportation operation and the possibility that this could lead to an influx of migrants to Canada is one of the main points to be analyzed by the committee.
A senior Canadian official had said before Trump's publications that Canadian officials expect Trump to issue decrees on trade and the border as soon as he takes office. The official was not authorized to speak publicly and spoke on condition of anonymity.
The Mexican Secretariats of Foreign Affairs and Economy have not yet commented on Trump's statements. Normally, such important matters are addressed by the president during her morning press conferences.
Last week, a senior Chinese trade official said that higher tariffs on Chinese exports would be counterproductive by raising prices for American consumers. The Vice Minister of Commerce, Wang Shouwen, also stated that China can handle the impact of such “external shocks.”