The foreign governments targeted in President-elect Donald Trump’s latest tariff threat said higher U.S. levies designed to rein in drugs and illegal migration could violate the North American free-trade deal Mr. Trump himself negotiated in his first term, and that dialogue is better than confrontation.
Mr. Trump said on social media he wants to impose a 25% tariff on all products coming into the United States from Mexico and Canada unless those countries take steps to halt illegal migration and the trade in fentanyl. Mr. Trump also threatened to levy an additional 10% tariff on all goods from China, which produces many of the precursor chemicals for deadly synthetic opioids.
Mexico, which depends heavily on its export markets in the U.S., said Mr. Trump’s threats violated the free-trade pact and would be counterproductive.
“The imposition of a possible tariff on Mexican products goes against the [United States-Mexico-Canada Agreement] and does not solve the common problems of the border between Mexico and the United States. We urge the use of bilateral institutional mechanisms to combat trafficking in people, drugs and arms,” Ricardo Monreal, a member of Mexico’s ruling Morena party, said on X. “An escalation of trade retaliation would only hurt people’s pockets, far from solving underlying problems. This measure would cause severe damage to the economy and the population of North America.”
Liu Pengyu, a spokesman for the Chinese embassy in the U.S., said “no one will win a trade war or a tariff war.”
Mr. Liu also said Beijing and Washington had been making progress in fighting fentanyl together, despite Mr. Trump’s claim Beijing is dragging its feet in containing the flow of drugs and the materials needed to process them to the U.S. through Mexico.
“The Chinese side has notified the U.S. side of the progress made in U.S.-related law enforcement operations against narcotics,” he said on X.
Canadian Prime Minister Justin Trudeau spoke to Mr. Trump after the president-elect issued his threat on his social media platform, Truth Social, taking the diplomatic high road after their talk.
“It was a good discussion and they will stay in touch,” a source told Reuters.
Tariffs are a form of tax or duty that is paid on imports.
Mr. Trump says tariffs will force companies to base or keep their operations in the U.S. and employ American workers while creating revenue to fund domestic programs. The U.S. relied on tariffs as a primary source of government revenue until the federal income tax was imposed in the early 20th century.
While tariffs hurt foreign countries by making their products more expensive and harder to sell in the U.S., foreign countries don’t pay the tariffs directly to the U.S. Treasury. Companies in the U.S. pay the levies and decide whether to pass along the cost to consumers in the form of higher prices.
Economists also predict countries targeted by new U.S. tariffs will respond by putting their own duties on U.S. exports.
Mr. Trump calls tariffs “the greatest thing ever invented” and sees them as a bargaining chip with foreign nations to influence policy or prevent wars.
The president-elect’s threat late Monday can be interpreted as just that — a threat to compel certain outcomes before Mr. Trump takes office. He will not be inaugurated until Jan. 20.
“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. In other words, [Mr. 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,” Bill Ackman, a billionaire hedge fund manager who is outspoken on political issues, wrote on X. “This is a great way for Trump to effect foreign policy changes even before he takes office.”
Mr. Trump’s most aggressive tariffs were aimed at Beijing, which he blames for fentanyl deaths in the U.S. A new 10% tariff would come on top of levies imposed during the first Trump administration, some of which were kept in place by the Biden administration.
Mexican cartels often make fentanyl with chemicals obtained from China, before trafficking the finished product into U.S. communities.
Mr. Trump and his advisers are also concerned that Chinese firms are investing heavily in Mexico to get around pending tariffs on goods produced in China.
Mexican President Claudia Sheinbaum recently rejected the idea that Chinese goods, generally, enter the U.S. and Canada through Mexico and suggested her government would respond if Mr. Trump carried out his threats.
“One tariff would be followed by another in response, and so on until we put at risk common businesses,” Ms. Sheinbaum said.
The new Mexican president said Mexico had already done a lot to stem unchecked migration into the U.S. and to halt the flow of fentanyl, suggesting demand for the deadly illegal drug in the United States was the real issue.
Fentanyl “is a problem of public health and consumption in your country’s society,” Ms. Sheinbaum told reporters, according to the Associated Press.
China said Mr. Trump’s policies risk hurting economic growth in both countries.
“China carries out trade cooperation with other countries in accordance with international rules and market principles, and mutual benefit is a defining feature of such cooperation,” Mao Ning, a spokeswoman for the Chinese Foreign Ministry, said Tuesday. “We always believe that politicizing economic issues serves no one’s interest.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.