Donald Trump has promised to sign an executive order on the first day of his presidency imposing customs duties of 25% on all products from Mexico and Canada, as well as 10% on China. He announced it this Tuesday morning in two different publications on his Truth Social network, where he alluded to immigration and drug trafficking as reasons for doing so.
“On January 20, as one of my many first executive orders, I will sign all necessary documents to impose a 25% tariff on ALL products entering the United States and its ridiculously open borders with the Mexico and Canada. This tariff will remain in effect until drugs, including fentanyl, and all illegal immigrants end this invasion of our country. “Mexico and Canada have the absolute right and power to easily resolve this issue,” Trump wrote in an initial message.
In a second publication, he assured that “we will impose on China an additional customs duty of 10%, in addition to any other additional customs duties, on all products” that are exported to the United States until that drug trafficking, particularly fentanyl, is resolved. He also regretted that the Chinese authorities had not kept their promise to impose the death penalty on fentanyl traffickers.
Trump picked up the old playbook he used during the first administration and issued a threat against the country’s three major trading partners through social media posts. It used to be Twitter, now it looks like it will be Truth Social.
The immediate effect that can be expected from the application of the tariffs is an increase in prices, which would go against Trump’s promise to control inflation and lower the price of shopping carts. Not to mention the impact this may have on the US auto industry itself. A good portion of his voters elected him for his economic promises.
Throughout the campaign, the Republican had already promised to apply protectionist policies, particularly with China. In March, at a rally in Ohio, he promised he would impose “a 100 percent tariff on every car that comes in.” He made the statement adding that if he did not win the election it would be “a bloodbath”, theoretically in reference to the auto industry. He also promised to impose tariffs of 60% on Chinese imports, as well as another levy of between 10% and 20% on imports from other countries.
The idea of imposing a 100% tariff on cars imported from China was also replicated with cars imported from Mexico. Trump announced the measure at a rally in September and assured that the only way to avoid these accusations would be to move the factory to the United States. The proposal has raised alarms in the U.S. motorsports industry, as many manufacturers are making their cars cheaper in Mexico or other countries to cut costs.
The truth is that the manufacturing of American cars on Mexican territory, which Trump wants to put an end to, is possible thanks to a trade agreement negotiated by him during his previous presidency. Trump’s proposal concerning these new tariffs that he announced for Mexico and Canada would amount to violating the treaty signed with the two other countries in 2020. The Republican was in favor of this new agreement which replaces NAFTA (Free Trade Agreement). North American exchange) of 1994 that the Republican had criticized. during his previous election campaign.
The treaty is due to be revised in 2026 and the president-elect’s team is already considering possible changes to prevent China from using Mexico as a base for exporting its electric vehicles, steel and other products to the states -United. In May, current President Joe Biden already opened a new front with China by announcing an increase in import customs duties. Biden announced that private vehicles would go from a 25% tax to 100% and that these increases would not take effect until 2025 and 2026, as the White House explained in the press release.
Although the Republican has made on-air announcements about his protectionist policies, he has yet to present a clear, articulated plan for what we can expect once he takes office. For now, the only indicators are their promises and announcements like the one this Tuesday morning.
Just as this is not the first time Trump has played politics based on tweets, it is also not the first time he has used his trade policy to try to solve other problems that are not not related to the question at hand. In 2019, he had already announced a series of tariff increases against Mexico in order to pressure the Mexican government to stop the arrival of Central American migrants in the United States. The Republican said he would impose a 5 percent tax on Mexican goods, which would increase by another 5 percent each month until he considers the border issue resolved.
