Specifically, President-elect Trump has indicated his plan to sign an executive order on January 20, 2025, following his inauguration, which will impose a 25% tariff on all imports originating from Mexico and Canada.
Furthermore, he indicated that China would face an additional 10% tariff on top of any existing tariffs until it effectively addresses the issue of fentanyl smuggling.
This action could significantly escalate tensions with the United States' three largest trading partners and may result in increased costs for American consumers, as tariffs operate similarly to taxes on imported goods..
The United States holds the position of the largest importer globally, with China, Mexico, and Canada accounting for approximately 40% of the $3.2 trillion worth of imported goods annually, as per official statistics.
In response to concerns about the illegal drug trade, China has defended its initiatives and emphasized that a trade war would not produce any beneficial outcomes for any party involved.
Following his tariff announcement, Trump engaged in a brief 10-minute conversation with Canadian Prime Minister Justin Trudeau, focusing on trade and border security, as reported by BBC, a Canadian government official said. The discussion was described as "good" by the source.
During their conversation, Trudeau highlighted that the number of migrants crossing into Canada is significantly lower than those crossing the US-Mexico border, according to the official statement.
Mexico's finance ministry remarked that "Mexico is the United States' primary trade partner, and the USMCA offers a framework of certainty for both national and international investors."
The proposed measures could significantly disrupt the global supply chain and would severely impact the three nations affected by the tariffs.
According to Trump, the tariffs imposed on Mexico and Canada will remain until both countries take decisive action against drug trafficking, particularly concerning fentanyl, and illegal immigration across the border. He expressed this in a post on his Truth Social platform.
"Mexico and Canada have the complete authority and capability to resolve this longstanding issue," he stated. "It is time for them to face substantial consequences!"
In a subsequent post, Trump criticized Beijing for not adhering to commitments he claims were made by Chinese officials regarding the enforcement of the death penalty for individuals involved in fentanyl trafficking, a potent synthetic opioid.
A representative from the Chinese embassy in Washington responded to the BBC, asserting that the notion of China intentionally allowing fentanyl precursors to enter the United States is entirely unfounded.
"China maintains that economic and trade cooperation with the US is mutually advantageous. A trade war or tariff conflict will benefit no one," the spokesperson remarked.
The Biden administration has urged Beijing to take stronger measures to curb the production of substances used in fentanyl, which is estimated to have caused nearly 75,000 American deaths last year.
During his campaign, Mr. Trump cautioned Mexico and China about the possibility of tariffs as high as 100% if deemed necessary, a rate considerably higher than those implemented during his first term.
Additionally, Trump has indicated his intention to revoke China's most-favored-nation trading status with the United States, which provides the most favorable conditions regarding tariffs and other trade restrictions.
Last year, over 80% of Mexico's exports were directed to the United States, while approximately 75% of Canada's exports went to its southern neighbor.
Despite years of contentious trade relations between the two largest economies, the United States still represents about 15% of China's total exports.