By Jeff Mordock – The Washington Times – Monday, November 25, 2024

President-elect Donald Trump said Monday he will impose a 25% tariff on all products coming into the U.S. from Mexico and Canada, and additional 10% levies on all Chinese products, on his first day in office as penalties for deadly fentanyl and illegal immigrants pouring across the borders. 

In a series of posts on Truth Social, Mr. Trump said that on Jan. 20, he will sign “all necessary documents” in one of his first executive orders to levy tariffs on all products imported from the North American neighbors. He said the tariffs will remain in effect until Canada and Mexico crack down on the flow of fentanyl and illegal immigrants.

Mr. Trump also said he would levy the additional 10% tariff on all Chinese goods, many of which are already under tariffs imposed during the first Trump administration. 

“This tariff will remain in effect until such time as drugs, in particular, fentanyl and all illegal aliens stop this invasion of our country,” he wrote. “Both Mexico and Canada have the absolute right and power to easily solve this long-simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”

The vow is the continuation of Mr. Trump’s campaign promise to impose import taxes of between 10% and 20% on all foreign goods, with tariffs reaching as high as 60% of Chinese goods. Canada, Mexico and China are the U.S.’s largest trading partners. 

Mr. Trump’s most aggressive tariffs in his first term were aimed at Beijing, which he blames for fentanyl deaths in the U.S. 

“I’ve had many talks about China about the massive amounts of drugs, in particular fentanyl, being sent into the United States — but to no avail,” Mr. Trump wrote on Monday. “Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this, but unfortunately, they never followed through.”

The tariff pledge comes just days after Mr. Trump announced he would nominate financier Scott Bessent as his Treasury secretary. Mr. Bessent will be critical to implementing Mr. Trump’s trade agenda and is extremely pro-tariff. 

During his first term, Mr. Trump imposed tariffs on foreign steel and aluminum, including from Canada and Mexico. He also pressured both countries to renegotiate the North American Free Trade Agreement with new terms aimed at boosting U.S. manufacturing.

Mexico, China and Canada are the nation’s top three suppliers of imported goods, accounting for roughly 42% of all U.S. imports this year through September, according to data from the U.S. Census Bureau. The three countries also spent about $830 billion on U.S. exports. 

The tariffs would affect industries ranging from auto manufacturers, farmers, food packages and others who ship materials and goods into the United States.

Some economists have warned that tariffs would result in increased prices, from foreign companies and U.S. importers passing the cost of the tariffs on to consumers. That could result in increased inflation and lower employment because importers are taking on more expenses, they say.

The economists also predict that tariffs could cause supply chain problems because shipping goods and materials become more expensive. They also warn of foreign retaliation against U.S. exports.

Others, including Mr. Trump, have argued that tariffs are a way to protect U.S. manufacturing without doling billions in taxpayer-funded handouts to large corporations to keep them operating in America. They also say it’s a way to raise money for the federal government. 

Studies have found mixed results for tariffs.

A 2019 study from a group of economists, including officials at the International Monetary Fund and the Treasury Department, found that the tariffs imposed during Mr. Trump’s first term produced only a small increase in prices on goods subjected to tariffs, suggesting that importers absorbed most of the cost. 

However, a 2022 study by the University of California, Davis concluded that repealing just the Trump-era tariffs on Chinese goods would reduce inflation by 0.26 percentage points because it would reduce costs being passed on to U.S. consumers.

• Jeff Mordock can be reached at [email protected].