Trump’s tariff threats promise to be the talk of the Thanksgiving dinner table this week.
The president-elect on Monday evening reiterated day one plans to levy duties on Mexico and China—and now, he’s added Canada to the mix, saying that the U.S.’ northern neighbor is facilitating the transport of migrants, “Crime and Drugs.”
“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,” he wrote on Truth Social.
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According to Trump, the duties will remain in place until the countries curb the flow of fentanyl and migrants into the U.S.
“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem,” he added. “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!”
At the same time, Trump took aim at a familiar adversary, reiterating the claim that China is supplying the fentanyl and precursor inputs that are sickening Americans at alarming rates.
“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 wrote.
“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 the matter is resolved, Trump said the U.S. will charge additional 10-percent tariffs, “above any additional Tariffs,” on the litany of China-made products hitting U.S. shores. Trump was presumably referring to the Section 301 duties he implemented on about $380-billion-worth of products during his first term in office, which ranged between 7.5 percent and 25 percent.
While the drum-beating about duties is nothing new for the former president, it’s notable that Trump seems to have pulled back on previous statements about hitting China with duties of 60 percent to 100 percent. The threat was a familiar refrain throughout his campaign for the presidency, stoking concern within the business sector about how the added tariff burden would impact margins and prices at retail.
Those attitudes may be tempered, however, by newly announced Treasury Secretary appointee Scott Bessent, a finance aficionado who Wall Street executives are lauding as a common-sense pick for the bombastic president-elect.
Leaders in Mexico and Canada are on high alert following Trump’s Monday evening comments.
Mexican President Claudia Sheinbaum said in a press conference Tuesday morning that she planned to pen a letter to Trump advising that the 25-percent tariffs on Mexico and Canada would lead to greater inflation and loss of jobs across both nations.
“To one tariff will come another and so on, until we put our common businesses at risk,” she said, according to a report from Reuters.
Meanwhile, Canadian Prime Minister Justin Trudeau reportedly jumped into action to head off the tariff threat, calling Trump at his Mar-a-Lago residence in Florida within hours of the Truth Social announcement, according to the New York Times.
Canadian Premier Doug Ford—the leader in a national movement to cut Mexico out of the U.S.-Mexico-Canada Agreement (USMCA) and pursue a bilateral trade program with the U.S. alone—said Trump’s 25-percent tariff proposal “would be devastating to workers and jobs in both Canada and the U.S.”
“The federal government needs to take the situation at our border seriously. We need a Team Canada approach and response—and we need it now. Prime Minister Trudeau must call an urgent meeting with all premiers,” he tweeted.
The American fashion sector has also wasted no time in weighing in on the potential ramifications of levying duties on Western Hemisphere trade partners.
“We hope President-elect Trump rethinks these tariffs as they relate to footwear, as such measures would place an unnecessary burden on American families when budgets are already stretched thin,” Matt Priest, CEO and president of the Footwear Distributors and Retailers of America (FDRA) said early Tuesday. “A 25-percent tariff on products from Mexico and Canada and a 10-percent tariff on goods from China would directly increase costs for retailers and consumers, leading to higher prices on everyday essentials like shoes.”
“During this holiday season, Americans do not want to see or hear about an additional tax on items they need most,” he added. “Families deserve relief, not policies that make it harder to afford gifts, winter essentials, and footwear for the new year.”
“Imposing levies is not a path to real leverage. It may take a few months before these Trump Taxes kick in as spiraling prices for consumers, but if the newly announced tariffs on U.S. imports from Mexico, Canada, and China are implemented—which will affect more than half of all trade—the main impact will be inflationary for all Americans on essential everyday goods,” American Apparel and Footwear Association (AAFA) CEO and president Steve Lamar told Sourcing Journal.
“Mexico is a significant source of jeans and leather footwear. These threats will could also fumble the one trade agreement Trump takes credit for in his previous term—USMCA,” he added.
Kim Glas, chief executive and president of the National Council of Textile Organizations (NCTO), countered the finished goods trade groups’ perspectives, saying, “The domestic textile manufacturing industry has long suffered because of illegal Chinese trade practices, so when President-elect Trump talks about imposing a hefty tariff on finished textile and apparel products imported from China, that is welcomed by U.S. textile manufacturers.”
However, Glas said the new tariffs “must go hand in hand with immediate action to close the de minimis loophole and stepped up customs enforcement, or importers will just shift to that model even more to circumvent higher tariff rates.” The trade provision, which allows shipments worth $800 or less to enter the country duty free, facilitates the Customs entry of up to 4 million packages per day.
“If the new administration levies additional penalty tariffs, it has to be done in concert with closing this loophole on Day 1 and we will continue to press for these actions to be taken in tandem,” Glas said. “This loophole acts as a gateway to fentanyl, its precursors, products made with forced labor and unsafe products, hurting our people and our communities and economy.”
Glas said NCTO also aims to work closely with the incoming administration “to stress the importance of maintaining a vibrant U.S.-Mexico-Canada coproduction chain, which supports thousands of workers in the United States and the region.”
“Mexico and Canada represent a major market for the U.S. textile industry under the USMCA. As such, tariffs on these imports under the free trade agreement would harm that critical coproduction chain,” she said. “We encourage the incoming Trump administration to take a measured approach when it comes to imposing tariffs on Mexican and Canadian imports.”
This article has been updated to reflect comments from Steve Lamar and Kim Glas.
