US President-elect Donald Trump wants to impose high import tariffs on all goods from Mexico and Canada as well as additional tariffs on goods from China on his first day in office. He will introduce this as one of his first orders on January 20, Trump said on the platform Truth Social, which he co-founded.
Tariffs of 25 percent are to be imposed on goods from Mexico and Canada. The US president-elect justified this by saying that immigrants bring crime and drugs across these two borders into the USA. 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 until they do not do that, it is time for them to pay a very high price,” Trump explained.
— Donald J. Trump Posts From His Truth Social (@TrumpDailyPosts) November 26, 2024
In response to Trump’s announcement, a spokesman for the Chinese embassy in Washington warned of the consequences of a trade conflict. “Nobody will win a trade war or a tariff war,” wrote Liu Pengyu on the X platform. The economic and trade cooperation between China and the USA is beneficial for both sides. There has also been progress in the two countries’ fight against the drug fentanyl.
China-US economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a #tariff war.
— Liu Pengyu 刘鹏宇 (@SpoxCHNinUS) November 26, 2024
The counternarcotics authorities of #China and the #US have resumed regular communication since the San Francisco Summit. The Chinese side has notified the US… https://t.co/1EPLyApiy9
In a statement published on Platform X, the Canadian government emphasized the close ties between the two economies. It is a “balanced and mutually beneficial relationship.” Canada buys more goods from the USA than from China, Japan, France and Great Britain combined. In addition, around 60 percent of US oil imports come from Canada, it said. The security and integrity of the shared border is Canada’s highest priority.
The New York Times reported that Canadian Prime Minister Justin Trudeau spoke with the president-elect about trade relations and border security immediately after Trump’s announcement.
Borrell warns of trade war due to Trump tariffs
In view of the new tariffs announced by future US President Donald Trump, EU Foreign Affairs Chief Josep Borrell fears a trade war.
If everyone imposes tariffs on everyone else, this will provoke reactions, warned Borrell on the sidelines of a meeting of foreign ministers of seven leading industrial nations (G7) in Fiuggi, Italy. “We are ready, we are prepared to take countermeasures,” he said.
Borrell, who is a member of the outgoing EU Commission, recalled that he will no longer be in office as of Monday. He cannot speak for the future EU Commission. But if Trump wants to start a new trade war, it will cause difficulties for everyone, starting with the Americans themselves.
Josep Borrell: “We are ready to take countermeasures.”Image: keystone
Trump has courted votes with tariff promises
Trump had already announced far-reaching tariffs during the election campaign. Tariffs are a type of surcharge on imported goods. They are due at the border when a company or consumer in the USA buys the product from abroad. Trump argues that his tariff policy will lead to US companies producing more in the USA again. This will create jobs. It is the classic “America First” policy that the Republican has already pursued during his first term in office.
The Democratic US President Biden has also opted for 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 certain sectors, the tariffs announced by Trump are more far-reaching.
Tariffs could fuel inflation
Many experts fear that this isolation policy will lead to higher prices. After all, many goods from abroad cannot be produced in the USA overnight. Companies are therefore still dependent on imports from abroad for production – import duties then increase the costs of these goods.
Companies are expected to simply pass these costs on to consumers. In addition, countries affected by the tariffs are likely to respond with counter-tariffs – which in turn is bad for US companies that export a lot.
Trade conflicts have shaped Trump’s first term in office
Washington and Beijing have been embroiled in a trade conflict for years. Biden left tariffs on China that Trump had introduced in place. The US also imposed economic sanctions and export restrictions to make it more difficult for Beijing to access US technology. Biden’s administration also introduced restrictions on US investments in China. Biden also initiated large-scale investments at home to make America’s supply chains more independent – especially from China. However, both countries are closely intertwined economically.
Donald Trump and Xi Jinping: Trade conflicts already arose during the Republican’s first term in office.Image: keystone
During his first term in office, Trump also imposed tariffs on certain products from Mexico and Canada, such as steel and aluminum. He repeatedly argued with the two countries about tariffs and set various conditions to avoid punitive tariffs.
