Australia’s move as Donald Trump launches trade war with new tariffs on Canada, Mexico, China

Australia is seeking talks with America “as soon as is humanly possible” after Donald Trump slapped new tariffs on Canada, Mexico and China.

Australian Trade Minister Don Farrell is seeking talks with America “as soon as is humanly possible” with a plan to be “cool, calm and collected”.

It comes after US President Donald Trump slapped 25 per cent tariffs on all Canadian imports with the exception of energy resources, which will be hit with a 10 per cent levy.

In response, Canada will target American goods worth $171 billion ($155 billion CAD) with counter tariffs. The first round, worth $33 billion ($30 billion CAD), includes cosmetics, appliances, tires, tools, plastics, furniture, coffee, wines and spirits, dairy and fruits.

Mr Trump also signed off on broad 25-per cent tariffs on Mexico and a 10-per cent tariff on China in addition to levies already in place.

US President Donald Trump speaks to the press after signing an executive order in the Oval Office of the White House in Washington, DC on January 31, 2025. Trump is imposing steep tariffs on major US trading partners Canada, Mexico and China. Picture: Mandel Ngan / AFP

Mr Farrell told The Australian Financial Review he had already “reached out” to his US counterpart Howard Lutnick to talk.

“As soon as is humanly possible, I will be talking with the Americans,” Mr Farrell told the publication, adding that his objective was to be “cool, calm and collected, as we were with the Chinese, and not panic”.

Mr Farrell will stress that the US has a $40 billion trade surplus with Australia, whereas the country had a trade deficit with Canada, Mexico and China, according to the AFR.

news.com.au has contacted Mr Farrell’s office for comment.

A Department of Foreign Affairs and Trade spokesperson said the department was in talks with the Trump Administration regarding the economic relations and the shared free trade agreement .

“President Trump has publicly expressed concern about trade deficits with trading partners. The United States has had an unbroken trade surplus with Australia since 1952,” they said.

“Australia is a trading nation, and we will always continue to advocate for free and fair trade.”

Australian Trade Minister Don Farrell said he had reached out to his US counterpart to discuss how the imposition of tariffs on Australia would be detrimental to the US. Picture: NewsWire / Martin Ollman

Mr Trump in his order cited illegal immigration and the trafficking of fentanyl as reasons for the “emergency” measures.

Fentanyl is a highly potent synthetic opioid which can be prescribed by doctors to treat severe pain. It is up to 50 times stronger than heroin and 100 times stronger than morphine, according to the US Centers for Disease Control and Prevention.

Illegally made fentanyl in powder form can be mixed with drugs like heroin, cocaine, and methamphetamine, making the drugs “cheaper, more powerful, more addictive, and more dangerous,” the CDC states. Many people may be unaware that their drugs contain illegally made fentanyl.

On his social platform Truth Social, Mr Trump also expressed general outrage at trade deficits.

“I made a promise on my campaign to stop the flood of illegal aliens and drugs from pouring across our Borders, and Americans overwhelmingly voted in favor of it,” he wrote.

In a separate post, he said: “The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the ‘Stupid Country’ any longer.”

Canada's Prime Minister Justin Trudeau says Canada will hit back at US tariffs with 25 per cent levies of its own on select American goods. Picture: Dave Chan / AFP

Mexico’s President Claudia Sheinbaum said she rejected the White House’s suggestions that her government had alliances with criminal organisations and the US should address the demand for drugs internally.

In a lengthy post to X, she said “problems are not resolved by imposing tariffs, but by talking and dialoguing”.

“Mexico does not want confrontation. We start from collaboration between neighbouring countries. Mexico not only does not want fentanyl to reach the United States, but anywhere,” Ms Sheinbaum wrote.

She proposed to Mr Trump that the countries established a working group with their best public health and security teams.

Mr Trump vowed to impose the tariffs on Canada, Mexico and China back in November after winning the US election against then Vice President Kamala Harris.

In social media posts revealing his plan, Mr Trump had blamed unauthorised immigration, “crime and drugs” for the tariffs on goods from bordering countries Mexico and Canada, and cited Chinese-made fentanyl as his reasoning for additional tariffs on goods from the Asian country.

Many economists warned that tariffs would hurt growth and push up inflation, since they are primarily paid by importers bringing the goods into the US, who often pass those costs on to consumers.

But those in Mr Trump’s inner circle insisted that the tariffs are a useful bargaining chip for the US to push its trading partners to agree to more favourable terms, and to bring back manufacturing jobs from overseas.

Originally published as Australia’s move as Donald Trump launches trade war with new tariffs on Canada, Mexico, China