President-elect Donald Trump announced late on Monday that he plans to impose a 25% tariff on all products from Mexico and Canada starting on Day 1 of his second term, compelling America’s neighbors to crack down on fentanyl trafficking and illegal immigration. At the same time, Trump indicated an extra 10% tariff on Chinese imports, blaming the Chinese government for failing to stem the flow of drugs manufactured in their jurisdiction.

“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,” Trump wrote on Truth Social. “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. 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!”

A second post took aim at China, which has long been the world’s leading supplier of synthetic drugs for transport to the American market.

“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States – But to no avail,” Trump said. “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, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”

“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,” he continued. “Thank you for your attention to this matter.”

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In response, Mexican President Claudia Sheinbaum indicated that Mexico may retaliate with similar tariffs, emphasizing that such measures could lead to inflation and job losses in both nations. She highlighted Mexico’s efforts to address migration and drug trafficking, asserting that cooperation, rather than tariffs, is needed to tackle these issues effectively.

“One tariff would be followed by another in response, and so on until we put at risk common businesses,” she said. “It is unacceptable and would cause inflation and job losses in Mexico and the United States. If a percentage of what the United States spends on war were dedicated to peace and development, that would address the underlying causes of migration.”

Meanwhile, just hours after Trump’s statements, Canadian Prime Minister Justin Trudeau reportedly called the president-elect to discuss the situation.

“Shortly after Trump’s post, Trudeau contacted Trump and the two leaders spoke by phone,” said Bloomberg News reporter Brian Platt. “According to a source, they talked border security and it was a ‘constructive call. Trudeau pointed out that the issues at the Canadian border are minuscule compared to the US/Mexico border.”

The proposed tariffs have already caused instability in the financial markets, particularly affecting the automotive industry due to concerns over increased costs and reduced competitiveness. The Canadian dollar, Mexican peso, and Chinese yuan all experienced significant declines, and Asian markets, including Japan’s Nikkei and the broader Topix index, fell sharply due to concerns over potential trade wars. Meanwhile, Wall Street indices saw mixed reactions, with some companies benefiting from expectations of reduced interest rates.

Analysts warn that this could mark the beginning of a period of economic repricing and uncertainty, with potential ramifications on global trade relations.

A further complication arises from the fact that the tariffs could potentially violate the United States-Mexico-Canada Agreement (USMCA), which Trump himself created as a replacement for the North American Free Trade Agreement (NAFTA) during his first term.

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Connor Walcott is the lead writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”

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