Donald Trump’s tariffs on Canada, Mexico, and China

Translated by Valeria D’Alessandro

With only one month left until Donald Trump’s official settlement to the White House for his second term, the newly elected American president is already laying the foundation to fulfill his campaign promises and continue a key policy direction from his first term. His aggressive trade policies, which previously led to real trade wars, are expected to have significant global consequences.

Through his social media, Trump has announced that immediately after his new Republican administration takes office, he will impose trade tariffs of 25% on goods from Canada and Mexico, and 10% on good from China, the United States’ greatest global competitor. These measures are not without consequences, as the affected countries are among U.S.’s main trading partners: Canada, primarily for petroleum and gas; Mexico, for automotive components; and China, mainly for electronics. Finally, it is important to note that this term, Republicans will have complete control of both the U.S. House and Senate, allowing Trump’s policies to move forward with little resistance. His proposed trade tariffs are unlikely to be an exception.

But why would Trump impose such tough trade tariffs on his country’s main trading partners? Trump himself has presented a questionable explanation to the American public. According to him, these measures will help combat drug trafficking—particularly the so-called “fentanyl epidemic,” which he described as being as dangerous as, or even more lethal than, other drugs—and address what he calls “the illegal immigrations invasion,” a core theme of Trumpian rhetoric. Another possible reason could be concerns over the trade deficit. This year, the United States has imported more goods than it has exported, and Trump aims to address this issue through his tariff policies.

Not everyone agrees on the impact these tariffs would have on the American economy. Most of the opposition comes from the countries affected by them. The Chinese ambassador to Washington has stated that “no one would benefit from a new trade war,” while Mexico’s Minister of Economy, Marcelo Ebrard, declared that they are “ready to fight fire with fire.” Similarly, Canadian Prime Minister Justin Trudeau has expressed his concerns, warning that the tariffs could be a double-edged sword: “Our responsibility is to highlight that these measures will not only negatively affect Canadian citizens, who have a strong economic relationship with the United States, but will also lead to rising prices for American consumers and harm U.S. industries and companies.”

For this reason, Trudeau has organized an emergency meeting with leaders from Canada’s ten provinces to discuss a possible joint response. He also confirmed that he has had direct contact with Trump. While some analysts believe Trump’s threats are mere bluffs, Trudeau takes them very seriously: “When Donald Trump makes such promises, he always keeps them. I have no doubts.”

For Canada, trade and other partnerships with the United States are of critical importance. As a result, Prime Minister Just Trudeau requested a meeting with Donald Trump. The two leaders met for an informal dinner on November 30 at Trump’s Mar-a-lago resort in Palm Beach, Florida. This first official encounter between the newly elected Trump and a G7 leader appears to have had a positive outcome. After leaving Mar-a-Lago, Trudeau described the meeting as an “excellent conversation.” Trump also commented on the meeting in a post on his social media platform, Truth Social, calling it “very productive” and stating that they had begun “constructive discussions” on issues such as fentanyl trafficking across the northern U.S. border and the significant trade deficit the United States has with Canada. According to leaks, the discussion also covered other topics, including U.S. border security, global security matters, NATO, the war in Ukraine, and relations with China.

Despite the positive atmosphere at Mar-a-lago, Trum’s statements, given his unpredictable nature, have already sparked major concerns for Canadian economy, which is already facing internal challenges. These concerns stem from the fact that a significant portion of Canada’s energy exports go to the United States and, more broadly, that over than three-quarters of last year’s total exports were directed to the U.S. This trade relationship directly affects around two million Canadian jobs. Additionally, Trudeau’s popularity has hit a historic low due to a sluggish economy and the sharp rise in the cost of living over the past few years. With the next elections approaching, the Canadian Prime Minister is striving to ease domestic economic concerns as much as possible.

Furthermore, according to Roland Paris, former advisor to Trudeau and now director of the University of Ottawa’s Graduate School of Public and International Affairs, internal disagreements will make it more difficult to present a united front against Trump’s tariffs—unlike during his first term. The federal government is divided on how to respond to the threat. For example, Doug Ford, Premier of Ontario, has emphasized the severe risks these tariffs pose to his province, which alone could be considered the United States’ third-largest trade partner. In an interview with local media, Ford strongly criticized the move: “at 1,000%, this will damage the United States. […] I ask: why? Why attack your most loyal friend, your closest neighbor?” declared, interviewing local media. Meanwhile, other have taken a different stance. British Columbia’s Premier, David Eby, has simply suggested that Canada should seek new trade partners.

Regardless of how the Canadian government responds, Trump’s aggressive trade policies have already unsettled global markets. Moreover, his recent statements regarding BRICS – the economic bloc consisting of Brazil, Russia, India, China and South Africa, recently joined by Iran, Egypt, Ethiopia and UAE – suggests an increasingly global trade conflict. “The idea that BRICS countries could try to abandon the dollar while under our watch is DONE,” Trump wrote on his social media platform. He demanded that BRICS nations “not create a new currency or replace the powerful US dollar with another currency,” warning that any such move could result in 100% tariffs.

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