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Hours after President-elect <a href="https://www.washingtonpost.com/donald-trump/" target="_blank" class="contextual_link">Donald Trump</a> promised executive orders imposing new tariffs on all imported goods from China, Mexico and Canada — the three largest U.S. trading partners — officials and executives around the world were scrambling to figure out how to respond.

Trump said Monday night that tariffs of 25 percent on Mexican and Canadian goods and an additional 10 percent on Chinese merchandise would be aimed at halting an “invasion” of drugs and migrants into the United States. His pick for “border czar,” former Immigration and Customs Enforcement director Tom Homan, was set to travel to the U.S.-Mexico border later Tuesday.

“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!” Trump wrote in a<a href="https://truthsocial.com/@realDonaldTrump/posts/113546215051155542" target=_blank> post </a>on Truth Social, his social media site.

In a second post, Trump blasted Chinese leaders for not following through on earlier promises to impose the death penalty on fentanyl producers in China.

The threatened tariffs would affect large swaths of U.S. trade. Goods valued at more than $1.5 trillion move among the three North American nations, while the United States and China exchange about $600 billion worth. Mexican President Claudia Sheinbaum <a href="https://www.washingtonpost.com/world/2024/11/26/mexico-canada-tariffs-response/" target=_blank>said Tuesday morning</a> that Mexico would retaliate with its own tariffs if Trump follows through with his plans.

U.S. stock markets took the news in stride early Tuesday, though, with two major indexes trading slightly up from Monday’s close and one slightly down. The dollar rose about 2 percent against the Mexican peso and was up slightly against the Canadian currency.

U.S. imports from Mexico include cars, machinery, electrical equipment, <a href="https://www.washingtonpost.com/business/2024/11/04/trump-mexico-tariff-trade/" target=_blank>food</a> and <a href="https://www.washingtonpost.com/business/2023/04/28/mexican-beer-rules-america/" target=_blank>beer</a>. Canada <a href="https://tradingeconomics.com/canada/exports/united-states" target=_blank>supplies</a> oil and gas, machinery and parts and much else. The United States relies on China for electronics, particularly phones, along with toys, furniture and plastics. Economists <a href="https://www.washingtonpost.com/business/2024/11/04/trump-mexico-tariff-trade/" target=_blank>warn</a> that tariffs could affect grocery prices, which were a <a href="https://www.washingtonpost.com/business/2024/03/18/grocery-prices-election-wisconsin-biden-trump/" target=_blank>key election issue</a>. Mexico <a href="https://www.washingtonpost.com/business/2024/11/04/trump-mexico-tariff-trade/" target=_blank>supplied more than half</a> of U.S. fresh fruit imports in 2022, according to the Agriculture Department.

Trump’s social media posts on Monday are his<b> </b>most detailed comments on his tariff plans since he won the election this month. He said that on Jan. 20 he will sign “all necessary documents” to impose the import taxes via executive orders.

During the campaign, he vowed to impose tariffs of up to 60 percent on Chinese imports, plus a 10 to 20 percent levy on products from other countries.

John Veroneau, a former trade negotiator under President George W. Bush, said the announced tariffs would violate U.S. trade commitments.

Under the United States-Mexico-Canada Agreement (USMCA), which took effect in 2020, goods moving among the three North American nations cross borders on a duty-free basis.

“Obviously, unilaterally imposing a 25 percent tariff on all trade blows up the agreement,” said Veroneau, a partner at Covington &amp; Burling in Washington.

Each country affected by the president-elect’s plans is likely to retaliate with tariffs on U.S. goods, which will hurt exporters, he said.

In a<a href="https://x.com/DLeBlancNB/status/1861239067070910802" target=_blank> joint statement</a> following Trump’s posts, Canadian Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc addressed Trump’s concerns head on: “Canada places the highest priority on border security and the integrity of our shared border,” they said, calling “fentanyl from China and other countries” a “scourge” that Canadian and U.S. law enforcement agencies “work together every single day to disrupt.”

The statement pointed to the close relationship between the two countries, describing it as “balanced and mutually beneficial.”

Local government leaders in Canada reacted to the announcement with dismay. <a href="https://x.com/francoislegault/status/1861214532498018436" target=_blank>François Legault</a>, the head of Quebec, one of Canada’s largest provinces, said the decision “poses an enormous risk” to Canada’s economy and it should do “everything possible” to avoid the tariffs. Describing the impact of tariffs as “devastating” for workers, Ontario Premier <a href="https://x.com/fordnation/status/1861211084234883177" target=_blank>Doug Ford</a> urged Prime Minister Justin Trudeau to convene an urgent meeting to prepare a response.

Trade policies that would hurt Canadian interests were a U.S. election outcome long feared in Ottawa. In the run-up to the vote, Canada <a href="https://www.washingtonpost.com/world/2024/10/31/canada-election-trudeau-trump-harris/" target=_blank>sent top officials</a> to meetings across the United States meant to stave off a turn to protectionism.

The Mexican government, which had discounted the likelihood that Trump would impose stiff tariffs given the impact they would have on the U.S. economy, has sought to emphasize that it has been stopping U.S.-bound migrants, driving down the number reaching the border to the lowest in years. Around one-third of Mexico’s GDP depends on cross-border commerce with the United States and analysts said the proposed tariff would be ruinous.

“This measure would violate #TMEC (the North American free-trade treaty) and would send North American relations into a downward spiral,” Arturo Sarukhan, a former Mexican ambassador to Washington, <a href="https://x.com/Arturo_Sarukhan/status/1861197469092131003" target=_blank>wrote</a> on X. “Let’s see how both governments react, as well as U.S. consumers and businesses.”

Liu Pengyu, a spokesman for China’s embassy in Washington, said that counternarcotics authorities in China and the United States remain in close communication, adding that his country has taken action against narcotics operations in certain cases following U.S. requests. “No one will win a trade war or a <a href="https://x.com/hashtag/tariff?src=hashtag_click" target=_blank>#tariff</a> war,” he wrote in a<a href="https://x.com/SpoxCHNinUS/status/1861253158342676867" target=_blank> </a><a href="https://x.com/SpoxCHNinUS/status/1861253158342676867" target=_blank>post on X</a>.

“Fentanyl is an issue for the United States. In the spirit of humanity, China has given support to the United States’ response on this issue,” the Chinese Foreign Ministry said in a brief statement late Tuesday local time that did not mention tariffs or trade. “We hope the United States will not take China’s goodwill for granted.”

The Canadian dollar lost 1 percent of its value relative to the U.S. dollar shortly after Trump’s announcement, according to <a href="https://www.theglobeandmail.com/world/article-trump-tariffs-canada-mexico/" target=_blank>the Globe and Mail</a>. The U.S. dollar rose 2 percent against the Mexican peso, and<a href="https://www.reuters.com/markets/us/markets-react-trumps-tariff-vow-2024-11-26/" target=_blank> markets</a> in Asia tumbled.

Tariffs on Mexican and Canadian products would be especially disruptive for the auto industry. Half-finished vehicles often move across North American borders several times before they are completed. Adding a 25 percent fee to each movement could erode automakers’ profits or give consumers sticker shock.

The USMCA replaced the 1994 North American Free Trade Agreement, which Trump criticized during his first presidential campaign. Trump publicly hailed the new accord on several occasions, boasting that it represented an enormous improvement over the original trade pact.

“The USMCA is the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It’s the best agreement we’ve ever made,” he said in January 2020.

trumpcabinet-viz

Follow <a href="https://www.washingtonpost.com/politics/2024/12/02/trump-administration-transition/" target=_blank>live updates on the transition</a> to Trump’s second presidency. We’re <a href="https://www.washingtonpost.com/politics/interactive/trump-administration-appointees/" target=_blank>tracking the people Trump has picked or is considering to fill his Cabinet</a> and key positions in his administration.

The treaty includes a provision for a review of its terms in 2026. The Trump team already has been eyeing potential changes designed to prevent China from using Mexico as an export base for its electric vehicles, steel and other goods.

The tariff threats come at a time when migrant encounters at the U.S.-Mexico border have fallen. The U.S. <a href="https://www.cbp.gov/newsroom/stats/southwest-land-border-encounters" target=_blank>Border Patrol</a> recorded far fewer migrants illegally crossing the border from Mexico in fiscal year 2024 than the previous two years. On the border with Canada, numbers are much lower but have <a href="https://www.cbp.gov/newsroom/stats/nationwide-encounters" target=_blank>gone up</a>.

This is not the first time that Trump has tried to use trade policy to address unrelated issues. In May 2019, he announced a series of escalating tariffs against Mexico designed to pressure the Mexican government into stopping Central American migrants from crossing its territory. Trump said he would impose a 5 percent tariff on Mexican goods, which would increase in 5 percent increments each month until the border problem was resolved.

The announcement sparked criticism from business representatives and some Senate Republicans at the time, who called it a misuse of the president’s tariff authority.

Little over a week later, Trump lifted the tariff threat, saying that Mexico had agreed to take “strong measures” to curb the influx.

Trump’s plan to use trade policy as a tool to address two of the nation’s most vexing and complex problems — drugs and immigration — drew praise from Bill Ackman, a hedge fund manager.

Trump “is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America, fulfilling his America first policy,” Ackman <a href="https://x.com/BillAckman/status/1861198845574815947" target=_blank>wrote on X. </a>“This is a great way for Trump to effect foreign policy changes even before he takes office.”

But Ernie Tedeschi, former chief economist for President Joe Biden’s Council of Economic Advisers, said the North American tariffs would cost the typical American household almost $1,000 per year.

<i>Mary Beth Sheridan, Amanda Coletta and Christian Shepherd contributed to this report.</i>

An earlier version of this article incorrectly said that President-elect Donald Trump vowed to impose a tariff of 10 percent on Chinese merchandise. Trump vowed to impose an additional 10 percent tariff. The article has been corrected.

Nieman fellowship at Harvard University, 2002

National Press Foundation's Hinrich Award for Distinguished Reporting on Trade, 2021

When The Luck of The Irish Ran Out: The World's Most Resilient Country and Its Struggle To Rise Again

Yale University, MA in international relations, 1983

Wesleyan University, BA in government, 1981

David J. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today.

David J. Lynch

SAJA Daniel Pearl Award 2022 (India under Surveillance)

SAJA Award for Business Reporting 2022 (Facebook under Fire)

Member of the team to win the George Polk Award for Technology Reporting 2021 (The Pegasus Project)

Honorable mention, SABEW Award 2021 (Facebook Papers)

New York Society for Professional Journalists Award, 2016

Radio Digital Television Network Foundation Fellow, 2016

Inlaks Shivdasani Foundation Scholar, 2015

Honorable mention, World Media Summit Global Awards, 2014

Toto Funds the Arts Award, 2013

Delhi University, BA in English

Columbia Graduate School of Journalism, MA in Journalism

Niha Masih is a reporter at The Washington Post's Seoul hub, where she covers breaking news in the United States and across the world. Previously, she was The Post's correspondent in India, where she covered the rise of majoritarian nationalism, conflict in Kashmir, the covid crisis and digital surveillance of citizens.

Niha Masih

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Trump vows tariffs of 25% on Canada, Mexico; and 10% on China

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A photo of a shipping port with the headline: Trump says he will implement tariffs on Canada and Mexico. These are the products that would be impacted.

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Trump says he will implement tariffs on Canada and Mexico. These are the products that would be impacted.

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