Trump pledges 25 per cent tariffs on Canada and Mexico, deeper tariffs on China
Donald Trump has announced he will slug Mexico, Canada and China with massive tariffs on his first day in office in retaliation for illegal migration and drug trafficking.
World
Don't miss out on the headlines from World. Followed categories will be added to My News.
US President-elect Donald Trump has fired the first salvo in what could spiral into a global trade war, vowing to implement sweeping tariffs on his first day in office in retaliation for illegal drugs crossing America’s borders.
Two months before he returned to the White House, Mr Trump promised to slap a 25 per cent tariff on all imports from Mexico and Canada – two of America’s closest allies – as well as an extra 10 per cent tariff on imports from China.
His commitment came as internal research by the Reserve Bank of Australia warned an “extreme” trade war between the US and China would slow economic growth down under, potentially forcing the bank to cut interest rates to boost the economy.
During the US election campaign, the former president repeatedly threatened to hit all imports to the US with tariffs of at least 10 per cent – and at least 60 per cent for imports from China – in a dramatic escalation of his trade policy from his first term in office.
Mr Trump has largely steered clear of policy pronouncements since defeating Vice President Kamala Harris, instead focusing on appointing key figures to his new administration.
But in a pair of posts on his social media platform on Monday night (local time), he said that immediately after he was sworn in on January 20, he would sign an executive order to enact a 25 per cent tariff on imports from Mexico and Canada.
“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,” Mr Trump said.
“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!”
Fentanyl, a lethal opioid that is 50 times stronger than heroin, is the leading killer of Americans aged 18 to 45.
Mr Trump also promised an additional 10 per cent tariff on Chinese imports, complaining that Beijing had not acted on its promises to prevent the drug being sent to the US.
“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,” Mr Trump said.
“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs.”
Top economists cautioned during the election campaign that Mr Trump’s tariffs would drive up inflation, costing American households thousands of dollars each year to purchase products imported from overseas.
The Australian government has been working behind the scenes to spare Australian products from the President-elect’s universal tariff edict – which would breach our free trade agreement – while also bracing for the collateral damage of a potential global trade war.
AUSTRALIA’S TREASURER ‘CONFIDENT’ OF NAVIGATING US POLICIES
Treasurer Jim Chalmers says he is “confident” Australia will navigate Donald Trump’s economic policies after the incoming US President unveiled his plan to hit China with import tariffs.
The 10 per cent tax on Chinese goods was significantly lower than the 60 per cent Mr Trump had previously floated, while he did not announce any universal tariffs that would apply to Australia.
Mr Chalmers said Australia was “well placed and well prepared” to work with the incoming administration in the US.
“Our relationship with America under presidents and prime ministers from all sides is strong and enduring,” he said.
“The incoming US administration will bring a different suite of policies and we’re confident in our ability to navigate that change.”
Mr Chalmers said the government’s economic plan was about “making Australians big beneficiaries of the shifts that are shaping the global economy”.
“A strong relationship with our new counterparts in the United States presents big opportunities for Australia and we’re going to make the most of it,” he said.
China’s ambassador to Australia Xiao Qian said he believed Beijing and Canberra should use the “momentum” of improved relations to work together the “promote global trade, instead of compromising our respective national interests and our common interest”.
“The US policy on trade with China ... will have an impact (on other countries) and that is an important element that we have to consider,” he said.
“Bilaterally, as ambassador in Australia, what I can say at this moment is I expect China and the United States to engage with each other to talk about each other’s policies on how to manage our relationship at ... the proper time for them when the new administration comes into office in January.
Mr Xiao said his country’s relationship with the United States was “in transition,” noting President Xi Jinping had an “important” recent meeting with Joe Biden.
“There was a seven-point consensus reached between the two presidents as to how to manage the relationship during this period of time,” he said.
BIDEN TO ATTEND TRUMP INAUGURATION
US President Joe Biden and First Lady Jill Biden will attend President-elect Donald Trump’s inauguration in January, the White House said.
Then-president Mr Trump refused to attend Mr Biden’s inauguration in 2021, after falsely claiming his election win was fraudulent and whipping up a mob of supporters who stormed the US Capitol.
“The president promised that he would attend the inauguration of whomever won the election,” Deputy Press Secretary Andrew Bates told reporters flying with Mr Biden on Air Force One.
“He and the first lady are going to honour that promise and attend the inauguration.
“He views that as an important demonstration of commitment to our democratic values and to honouring the will of the people, as we continue to provide an orderly and effective transition.”
Despite repeatedly describing Mr Trump as a threat to democracy during the 2024 campaign,
Mr Biden has made a point of providing Mr Trump with the smooth transition that the Republican denied him.
Mr Biden invited the president-elect to the White House the week after the November 5 vote, in which Mr Trump beat Democratic Vice President Kamala Harris to win a historic comeback.
JUDGE DROPS CHARGE AGAINST TRUMP
Special Counsel Jack Smith moved to dismiss the case against Mr Trump for allegedly conspiring to overturn the results of the 2020 election.
Mr Smith, in a filing with the district judge presiding over the case, said it should be dismissed in light of a Justice Department policy not to prosecute a sitting president.
The department’s policy that sitting presidents may not be prosecuted “is categorical and does not turn on the gravity of the crimes charged, the strength of the government’s proof or the merits of the prosecution, which the government stands fully behind,” Mr Smith wrote.
Mr Trump previously vowed to fire Mr Smith on his first day in office.
But there is still the possibility that the charges could be refiled once Mr Trump completes his term in office.
MARKETS APPLAUD TRUMP TREASURY PICK
Wall Street stocks have jumped as investors reacted positively to Donald Trump’s Treasury Department pick at the start of a Thanksgiving-shortened week that will include economic data and earnings reports.
The president-elect’s selection of billionaire hedge fund manager Scott Bessent, who is considered a mainstream nominee not fond of trade tariffs, reassured investors on the potential direction of Mr Trump’s administration.
Positive sentiment about the nominee, who is also pro-cryptocurrencies, helped lift major indices further into record territory, with the Dow Jones Industrial Average up 1.1 per cent at 44,778.18.
About 15 minutes into trading, the broadbased S&P 500 gained 0.8 per cent to 6,018.70, also above its closing all-time high, while the tech-rich Nasdaq Composite index climbed 1.0 per cent to 19,199.78.
Monday’s trading trend is “predicated on a belief that Mr Bessent, while professing to make an extension of US tax cuts a policy priority, will also be focused on reining in the national debt, cutting the budget deficit to three per cent of GDP, and advocating for a more gradual implementation of tariffs so that US inflation does not take off again,” said Briefing.com analyst Patrick O’Hare.
TIKTOK CEO HOPEFUL TRUMP WILL STOP BAN
TikTok CEO Shou Chew has been seeking out Elon Musk’s advice about President-elect Donald Trump’s approaching second term, according to a report.
Musk endorsed Trump last summer and has been close with the president-elect since, even staying at Mar-a-Lago after the election and joining him on calls with leaders like Ukrainian President Volodymyr Zelenskyy.
Chew has reached out to Musk, the owner of X, more than once, asking him about the new administration and Trump’s potential tech policies, the Wall Street Journal reported, citing anonymous sources familiar with the matter.
TikTok is suing the Biden administration – citing the First Amendment – over a new law signed by President Biden that would ban the social media platform in the U.S. if China-owned ByteDance doesn’t divest by January.
The law addresses security concerns over the Chinese government having access to U.S. user information and influence over the popular app.
ByteDance executives had also reached out to Vice President Kamala Harris’ team before the election, according to the Wall Street Journal.
During his presidency, Trump signed an executive order to ban TikTok in the U.S. but has shifted his position during the campaign, telling CNBC earlier this year that Congress should “make that decision, because it’s a tough decision to make.”
He did, however, express national security concerns.
Trump also joined TikTok in June, saying in a video on Truth Social: “Those who want to save TikTok in America, vote for Trump.”
“We’re not doing anything with TikTok,” he added.
Trump plans to halt the ban when he gets into office, the Washington Post reported, citing unnamed sources.
Originally published as Trump pledges 25 per cent tariffs on Canada and Mexico, deeper tariffs on China
Join the conversation
Big changes for key members of Donald Trump’s family
As Donald Trump and his family re-enter the White House for a second time, we take look at what will be different – and what won’t be – this time around for America’s First Family.
Read more
‘I remember it so clearly, my family murdered there’
Guta Goldstein, 94, was sent to the ‘place of death’ – Auschwitz – the Nazi’s largest WWII concentration camp – at 14. There she lost her parents, grandparents, little sister and extended family.
Read more