Trump tariff threat on Canada, Mexico and China roils the world – Times of India

TOI correspondent from Washington: In a warning shot that echoed across major world capitals and business majors on Tuesday, US President-elect Donald Trump said he will issue executive orders on day one of his presidency imposing new tariffs on all imported goods from China, Mexico and Canada, Washington’s three largest trading partners, to stop the “invasion” of illegal migrants and drugs into the United States.
In a post on his Truth Social platform, Trump put the onus of containing illegal border crossings squarely on two immediate neighbors on its southern and northern borders, saying “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’s warning, coming amid reports he cited of migrant caravans winding its way across Mexico to breach the US border before his January 20 inauguration, proposes a 25 percent tariff on Mexican and Canadian goods.
In a second post, Trump took aim at Beijing for not following through on earlier promises to impose the death penalty on fentanyl producers in China, threatening an additional 10 percent tariff on all products from the country.
“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,” he said, adding that the tariffs would “remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
Trump did not name any other country, including India, from where an growing number of illegal immigrants are sneaking into the US in recent months from across the Mexican and Canadian borders after entering the continent through third countries. But the MAGA supremo’s tariff threat underscores his willingness to use blunt force instruments to achieve ends he has promised his base regardless of the nature of bilateral ties.
The so-called Trump tariffs would affect goods worth more than $ 2 trillion involving the four largest trading nations in the world, with possibly catastrophic consequences for all four and beyond if the matter is not resolved quickly. The blunt warning sent global currencies and markets into a tailspin, and had Canadian and Mexican leaders scrambling for the phone to reach the incoming administration, even as many US industry leaders and economists warned that eventually Americans too would suffer as businesses pass on the tariff overlay on to consumers and the troika of US trading majors imposed retaliatory tariffs.
Pundits on the liberal and moderate spectrum warned the move would lead to inflation and higher prices for the American consumer, with some arguing that Trump is trying to tank the economy before he takes over on January 20.
“Just a reminder: Tariffs aren’t paid by other countries. A tariff is basically a sales tax, raising the price of almost everything you buy,” Robert Reich, a former labor secretary in the Clinton administration warned. One cartoon showed Trump firing a bazooka at the trading triad but the move blowing off the head of a Trump voter standing behind him.
However, some prominent Trump supporters took a more nuanced view of the tariff threat, suggesting it was a negotiating tactic aimed at achieving his pledging to American voters.
“To be clear, according to Trump the 25% tariffs will not be implemented, or if implemented will be removed, once Mexico and Canada stop the flow of illegal immigrants and fentanyl into the U.S,” argued Bill Ackman, a billionaire hedge fund manager who supports the MAGA supremo. In other words, he said in a post, 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.”