Trump Vows To Raise Sweeping New Tariffs On China, Canada And Mexico

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Written by Ahmed Adel, Cairo-based geopolitics and political economy researcher

US President-elect Donald Trump has promised to raise tariffs on Chinese exports by 10% until the problem of drug trafficking is resolved while also threatening to impose a 25% tariff on products from Mexico and Canada until the migration crisis is addressed. However, his tariffs are not only targeted at the US’ neighbors and China but also Europe, which will only hurt an already struggling Germany.

“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said on his Truth Social network.

The former president also stated that Chinese officials have never kept their promise to combat drug trafficking, which enters the US, mainly through Mexico, “at levels never seen before.”

Trump also promised tariffs on Mexico and Canada over drug trafficking and illegal immigration.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” the billionaire said. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country! Both Mexico and Canada have the absolute right and power to easily solve this long-simmering problem.”

The president-elect accused thousands of people of crossing illegally into the US through its northern and southern neighbors, “bringing Crime and Drugs at levels never seen before.”

One of the Republican’s signature promises during his presidential campaign was to combat illegal immigration to the US. In this regard, he offered to undertake a mass deportation as soon as he returns to the White House.

On November 4, during a rally in North Carolina, Trump threatened to impose a 25% tariff on Mexican products if the government of President Claudia Sheinbaum does not prevent the entry of migrants and drugs into the US across the shared border.

In response, Economy Secretary Marcelo Ebrard said on November 12 that Mexico could respond with tariffs against the US if the Trump administration decides to take such a measure against the Latin American country.

“If you apply a 25% tariff to me, I have to react with tariffs, and I am your main importer, along with Canada,” he declared on Radio Fórmula.

According to him, this decision would have several repercussions for the US, including inflation.

However, not only the US’s neighbors, Canada and Mexico, and longtime trade adversary, China, are facing Trump’s wrath, but also Germany, the European Union’s most important but beleaguered economy. Germany is experiencing the biggest decline in growth of any developed country, the Financial Times reported, and this situation could worsen as economists warn of the serious vulnerability of the German economy to Trump’s new tariff plans.

The German economy will grow by just 0.6% in 2025, down from the 1.2% forecast for mid-year, the paper reports, citing data from the Consensus Economics survey. Germany’s real GDP has been stagnant since the second half of 2021, and the decline in industrial production – which remains 10% below its pre-COVID-19 level in December 2019 – has never stopped.

The German economy, which has relied on a strong export-oriented industrial sector for many decades, especially in the US, is in a particularly precarious position after Trump, who had promised to impose higher tariffs on European goods, won the presidential election. The extent to which German manufacturers are dependent on the US market is illustrated by the fact that the US accounted for 10% of German exports in 2023 – the highest figure in more than two decades – and Germany’s trade surplus with the US in 2023 reached a record €63.3 billion.

However, economists warn that Germany could suffer the consequences even before the introduction of a tariff as companies will stop investing in their country due to persistent uncertainty. In fact, they warn that the largest ones could relocate even more of their production to the US.

But it is not just German exports that will suffer. Life will become more difficult for local companies, even in their home market. For example, Chinese manufacturers will divert their cut-price products to the EU if US tariffs are even higher than those of their European counterparts, resulting in local producers facing increased competition and margins being squeezed even further.

As seen from Trump’s intentions to impose tariffs, his efforts to ensure that the US continues being the world economic powerhouse against the Chinese challenge do not only target adversaries but even neighboring countries and close NATO allies.

Whether this aggressive policy will lead to inflation, as Marcelo Ebrard predicts, remains to be seen, but what is certain is that partnerships and alliances mean little to the incoming Trump administration.

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