The new President of the United States, Donald Trump, has plans to introduce new tariffs on various goods coming from Canada, China, and Mexico. He imposed a 25% tariff on all goods that come from Mexico and Canada. According to Trump, the new tariff plan is to address key issues of illegal immigration. According to him, this illicit immigration harms US security and the economy. The main purpose of this move is to force Mexico and Canada to take stronger actions against this immigration and stop it.
Trump opposed China for not performing well. The nation is not making any effort to stop entering the United States from Mexico. Due to this reason, he has a plan to increase 10% more tariffs on Chinese goods along with the previous tariffs. Trump argues that China is not a supporting nation and has not taken any steps to prevent this issue.
On January 20, 2025, the new president signs these orders after being inaugurated. His objective is to pressure the different nations by applying tariffs. But the effectiveness of his approach is still not clear.
Imposing tariffs on countries is the key part of reshaping the economic values of the United States. He decided to put 10% tariffs on all imports and 60% tariffs on Chinese imports. In this way, Trump’s approach reduces the trade deficit and encourages domestic manufacturing.
Trump chose Scott Bessent as the Treasury Secretary. He supports tariffs because it is a powerful tool to achieve big goals. He said that tariffs are the only source that force nations to enhance defense spending. This tariff policy opens foreign markets to United States products, prevents illegal immigration, and ends trafficking. Tariffs were also seen as a deterrent against military threats.
According to Trump, increasing tariffs would boost American manufacturing by increasing the price of goods. It highlights that Trump’s first priority is economic nationalism, US industries, and workers. He does not want US interests to rely on foreign markets.
Trump’s main target is Chinese products because he proposed high tariffs on Chinese goods of over 60%. As compared to his first term presidency, this rise in tariffs is significant.
It seems like this move has led to strong reactions from global trade partners. In 2016, similar tariff hikes led to retaliatory measures from countries like Canada, creating trade disputes. These actions highlights that after imposing high tariffs, the trade war would be started between different nations
However, with the United States-Mexico-Canada Agreement (USMCA), Trump achieved a high level of success. This agreement was introduced in 2020. According to this agreement, there is the smooth flow of goods between the US, Canada, and Mexico with minimal duties, encouraging regional trade.
While the USMCA improved North American trade, Trump’s tougher approach to China could disrupt global trade relations and trigger economic uncertainty.
The use of illegal immigration and the fentanyl problem as justifications for terminating a trade deal demonstrates a tactic. This is in line with World Trade Organization (WTO) regulations that permit such measures on grounds of national security. It shows a preference for home goals over promises of international trade.
The USMCA pact offers certainty for investors, according to Mexico’s finance ministry, which emphasized the significance of the U.S.-Mexico economic partnership. Mexico’s aim to preserve business predictability and economic connections is emphasized in its answer.
Public Safety Minister Dominic LeBlanc and Deputy Prime Minister Chrystia Freeland emphasized the value of border security and economic collaboration with the United States. They emphasized how the trade relationship is fair and advantageous for both parties, especially for American workers.
A trade war would be detrimental to both China and the United States, the Chinese Embassy in Washington said. This demonstrates how increasing trade conflicts might jeopardize world stability.
