This is reported by RBK-Ukraine referencing ABC News and CNN. This information comes from Kontrakty.UA.
According to Trump, these tariffs are intended to halt the flow of drugs entering the United States and illegal border crossings.
On his Truth Social platform, Trump stated that one of the first orders he will sign upon taking office on January 20, 2025, will be the imposition of a 25% tariff on all goods imported to the U.S. from Mexico and Canada.
"This tariff will remain in effect until drugs, especially fentanyl, and all illegal immigrants cease their invasion of our country! Both Mexico and Canada have the absolute right and authority to easily resolve this long-standing issue. We demand that they exercise this power, and until they do, they will have to pay a very high price," Trump wrote.
Chinese Shock and Consequences
In another post, the newly elected president announced that he will impose an additional 10% tariff on goods coming from China. He justified this by stating that the country is doing too little to stop the flow of illegal drugs.
"Chinese representatives told me that they would implement the maximum penalty - the death penalty - for any drug dealers caught in this, but unfortunately, they have not done so, and drugs are entering our country, primarily through Mexico, at unprecedented levels," Trump claimed.
During his presidential campaign, Trump promised to establish tariffs on Chinese goods ranging from 60% to 100%, as well as a tax of 10% to 20% on every imported item from all U.S. trading partners.
One day before the elections, Trump stated at a rally in Pittsburgh: "I am imposing tariffs on Mexico. Every damn thing they sell to the United States must have a 25% tariff until they stop the importation of drugs."
Economists predict that tariffs of this magnitude will lead to higher prices for American consumers, as importers typically pass on some of these costs through these increased taxes to consumers.
According to the Peterson Institute for International Economics, Trump's tariffs will cost the average American household about $2,600 per year.
Market Reactions
Following this announcement, the Canadian dollar fell by 1.2% against the U.S. dollar, while the Mexican peso dropped by 2% against the dollar. The Chinese yuan, although government-controlled, traded higher - over 7.6% - in offshore markets.
The Australian and New Zealand currencies also declined.
The Australian dollar fell by 1% to $0.6438, marking its lowest level since early August and breaking through a key support level of $0.6441. It was unable to breach resistance at $0.6550 overnight, and support now rests far below at the August low of $0.6349.
The New Zealand dollar dropped by 0.6% to $0.5812, its lowest level in a year, with support looking scant at $0.5774, the level from October 2023.
Moreover, Trump’s intentions slightly impacted the start of trading in Asia.
Immediately after 01:30 GMT, the Shanghai Composite decreased by about 0.2%, the Nikkei fell by 1.4%, and futures for European stock indices dropped by more than 1%.
The Hong Kong Hang Seng remained unchanged.
What America Imports
According to the U.S. Energy Information Administration, the country primarily imports oil from Canada, which reached a record high of 4.3 million barrels per day in July. The U.S. also imports cars, machinery, various goods, plastics, and timber from Canada.
Most cars and auto parts for the U.S. come from Mexico, which surpassed China to become the largest exporter to the U.S. in 2023. Mexico is also a major supplier of electronics, machinery, oil, optical instruments, furniture, and alcohol.
The United States imports a significant amount of electronics from China, along with machinery, toys, games, sports equipment, furniture, and plastics.
According to CNN, during his first presidential term, Trump imposed tariffs on about $380 billion worth of goods from China, including baseball caps, luggage, bicycles, televisions, and sneakers. These tariffs also impacted foreign steel, aluminum, washing machines, and solar panels.
Much of the American imports from Canada and Mexico are exempt from tariffs due to the USMCA (The United States-Mexico-Canada Agreement), which Trump advocated during his first term. However, it remains unclear how Trump plans to implement the proposed tariffs without violating the USMCA.
The newly elected president typically refers to the passage of the USMCA, which replaced NAFTA (North American Free Trade Agreement), as a political victory and a hallmark of his presidency.
Trump’s Trade Wars
According to analysts at Bank of America, under Donald Trump's presidency, in the first half of 2025, there will be a 5% decline in currencies of emerging markets and a sell-off of sovereign bonds.
For insights on how the new president intends to increase tariffs on imports from Mexico, Canada, and China, and how global markets are reacting, read our special report.