25% on everything

Trump plans high tariffs against Mexico and Canada

In line with his "America First" policy, Trump is increasing the tariffs against his neighboring countries - experts expect this to increase the price of goods.

(Bild: APA/Associated Press)

US President-elect Donald Trump has announced high import tariffs of 25% on all goods from Mexico and Canada. He intends to issue an executive order to this effect on his first day in office. Additional tariffs of ten percent are planned on goods from China.

Trump announced the plan on the Truth Social platform, which he co-founded. The US President-elect justified the tariffs on goods from Canada and Mexico with immigrants who bring crime and drugs across these two borders into the US. Until this stops, the tariffs should remain in force.

Both Canada and Mexico have the power to solve the problem. "We hereby call on them to use their power, and until they do, it's time for them to pay a very high price," Trump explained.

Fentanyl as reason for tariff increase in China
Trump also justified the planned tariffs on Chinese goods with the fact that drugs such as the deadly fentanyl were entering the USA from that country. Although China had announced that it would take action against this, it had not done so. US President Joe Biden, who is still in office, met China's head of state Xi Jinping on the sidelines of the Asia-Pacific Economic Community (Apec) summit in the Peruvian capital Lima just over a week ago. Xi had assured Biden there that he also wanted to work with the future US administration under Trump.

Every year, tens of thousands of Americans die as a result of fentanyl abuse.

(Bild: Jae C. Hong / AP / picturedesk.com, Krone KREATIV)

China warns of trade war
Following the announcement, the Chinese embassy in Washington warned against a trade war between the world's two largest economies. "No one will win a trade or tariff war," said Liu Pengyu, spokesman for the Chinese embassy in Washington, on Monday. "China believes that economic and trade cooperation between China and the US is inherently beneficial to both sides."

China defends itself against accusations
Liu also rejected Trump's accusations that China is deliberately allowing drug-making substances to enter the USA. China had taken steps to combat drug trafficking following an agreement between President Joe Biden and Chinese President Xi Jinping last year. Most recently, China announced in August that it would tighten controls on three chemical substances that are crucial to the production of fentanyl. "All this proves that the claim that China is knowingly allowing precursors of fentanyl to enter the US is completely at odds with the facts and reality," Liu said.

Trump campaigned for votes with tariff promises
Trump had already announced far-reaching tariffs during the election campaign. He argued that his tariff policy would lead to US companies producing more in the USA again. This would create jobs. It is the classic "America First" policy that the Republican already pursued during his first term in office.

A cap with Trump's slogan "America First"

(Bild: APA/AFP)

Democratic US President Biden also relied on protectionism. He not only retained Trump's China tariffs for the most part, but also imposed new tariffs - on electric cars, for example. While Biden focused relatively specifically on certain industries, the tariffs announced by Trump are more far-reaching.

Fears of higher prices in the USA
Many experts fear that this isolationist policy will lead to higher prices. This is because 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 cost of these goods. It is expected that companies will 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 news 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 against China in force, which Trump had introduced. The US also imposed economic sanctions and export restrictions to make it more difficult for Beijing to access US technologies. Biden's government also introduced restrictions on US investments in China. In addition, Biden initiated large-scale investments at home to make America's supply chains more independent - especially from China. However, the two countries are closely intertwined economically.

Trump also imposed tariffs on certain products from Mexico and Canada, such as steel and aluminum, during his first term in office. He repeatedly clashed with the two countries over tariffs and imposed various conditions in order to avert punitive tariffs after all.