Trump targets America’s top three importers with tariffs

In a Truth Social post on Monday, President-elect Donald Trump vowed to impose sweeping new tariffs on its top three importers as soon as he takes office, promising 25% tariffs on all products from Mexico and Canada and an additional 10% tariff on goods from China.

For China, the news wasn’t hugely surprising: China’s industrial giants were already expecting heavy protectionist policies, with some people anticipating a move in line with Trump’s pledge for a 60% or higher tariff on Chinese products — a continuation of Trump’s trade war from his previous tenure in the White House, which has contributed to slowing imports from China into the US.

But for Canada and Mexico, this is unfamiliar territory.

With Mexico threatening to respond with tariffs of its own yesterday evening, some analysts are expecting that the tariffs on America’s northern and southern neighbors will end up being a negotiating tool — and there’s evidence to support that idea. In 2019, the US announced a 25% tariff on steel imports and 10% tariff on aluminum for most countries, then lifted the restrictions for Canada and Mexico in exchange for favorable terms as part of the three countries’ US-Mexico-Canada Agreement deal.

Once again, the USMCA renegotiation round is coming in 2026. The US is expected to have a long list of wants and this tariff announcement could be used as a future bargaining chip. As Jennifer Hillman, the former general counsel at the Office of the US Trade Representative, put it, “He is clearly looking for Canada and Mexico to come to him.”

While there were pockets of weakness in the stock market, with automakers and some heavy importers trading lower yesterday, investors mostly shrugged off the news, perhaps because “investors wager the pro-growth policies will come before trade tensions escalate,” per Luke Kawa.