When it became clear that Donald Trump had won the US presidential election in November 2016, the Mexican peso fell sharply, by more than 12% against the dollar. Eight years later, the Mexican currency has retreated − but only by 1.6% − in the wake of the winning candidate's tariff threats.
On his social media platform Truth Social, the president-elect, who thinks "tariff" is the most beautiful word in the dictionary, threatened on Monday, November 25, to levy a 25% tariff on all Mexican − and also Canadian − imports on his first day in the White House. While the news delivered a jolt, it was hardly the earthquake of 2016. Because the world has become accustomed to Trump's announcements, and because they don't necessarily produce the devastating effects that are predicted.
The purpose is, however, surprising. It consists of establishing an immediate balance of power with Mexico and Canada at a time when the future president has, in theory, no power until he takes office on January 20, 2025. The pretext for these sanctions is trafficking in fentanyl, a synthetic drug that has been wreaking havoc in the US. "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." "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," Trump wrote disapprovingly.
The third country targeted is China, accused of manufacturing the basic chemicals used to make these drugs. "Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught [shipping fentanyl to the US], but, unfortunately they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before. Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America," added the president-elect in another post.
Trump's attempt to solve social crises with tariffs is nothing new. During his first term, on May 30, 2019, Trump threatened Mexico with 25% tariffs if it didn't stop thousands of migrants from crossing the southern border into the US. Mexico's president at the time, Andres Manuel Lopez Obrador, deployed thousands of national guardsmen to halt migrants bound for the US. The tariff threat was dropped, recalls the Wall Street Journal.
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