Trump Announces Tariffs on Chinese, Mexican and Canadian Imports
United States President Donald Trump has announced tariffs on imports from China, Mexico and Canada to go into effect tomorrow.
- Goods from China will face an additional 10 percent tariff on top of existing taxes.
- Energy from Canada will face a tariff of 10 percent; other goods, 25 percent.
- Mexican imports will have a 25 percent tariff.
The order also removes an exception allowing low-cost goods to be shipped to the U.S. tariff free. This will hit Chinese retailers like AliExpress, Temu and Shein that can currently ship to individual consumers tariff free.
External threats: The International Emergency Economic Powers Act allows Mr. Trump to implement the tariffs by executive order in response to “unusual and extraordinary” threats outside the U.S. Mr. Trump has accused China of creating a safe harbor for drug manufacturers, Mexico of having “an intolerable alliance” with drug cartels, and Canada of allowing Mexican cartels to operate in the country and bring in drugs.
Deal with Mexico: After making the announcement, Trump and Mexican President Claudia Sheinbaum Pardo agreed to a deal that would delay the tariffs for two months. Mexico agreed to send 10,000 troops to the border to abate the flow of illegal drugs into America. Sheinbaum said the U.S. committed to taking action to limit the flow of guns across the border into Mexico.
Retaliation: Canadian Prime Minister Justin Trudeau promised to retaliate with 25 percent tariffs on goods coming from the U.S. Chrystia Freeland, Canada’s former foreign minister and leading candidate to replace Justin Trudeau as Liberal Party leader, said, “Americans are going to be astonished by the Canadian response.” China has made less specific promises of retaliation.
Tobi Lutke, cofounder of Canada’s biggest tech start-up, Shopify, encouraged the government to instead work with the U.S.:
Trump believes that Canada has not held its side of the bargain, and he set terms to prove that we still work together: Get the borders under control and crack down on fentanyl dens. These are things that every Canadian wants its government to do too. These are not crazy demands, even if they come from an unpopular source.
Will the EU be next? Mr. Trump said he would “definitely” put tariffs on goods from the European Union, calling the trade imbalance between the two blocs “atrocious.”
Disadvantage: Mr. Trump has received global criticism for these measures, but a lot of what he says about countries taking advantage of the U.S. is true. The EU, for example, slaps 10 percent tariffs on U.S.-made cars and foodstuffs—while the U.S. imposes tiny tariffs in exchange. China heavily subsidizes its manufacturing and even gives companies access to slave labor, so U.S.-based companies cannot compete.
Trade war: The Bible reveals the end result of these tensions: Unless America repents, Europe and China will band together to shut America out of world trade. There may be some U.S. victories along the way, but without repentance, we’re heading for an all-out trade war that America will ultimately lose. The last time Mr. Trump was in office, we described where this trade war would lead in our article “Spiraling Into Trade War.”