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 negotiated in his first term, and that dialogue is better than confrontation.
They also warned of retaliatory measures if Mr. Trump follows through on his threat to impose a 25% tariff on all products coming into the U.S. from Mexico and Canada.
“One tariff would be followed by another in response, and so on, until we put at risk common businesses,” Mexican President Claudia Sheinbaum said.
Ms. Sheinbaum, whose country depends heavily on its export markets in the U.S., said Mr. Trump’s threats violated their free-trade pact and ignored the root causes of migration.
“If a percentage of what the United States spends on war were dedicated to peace and development, that would address the underlying causes of migration,” she said in a statement directed at Mr. Trump.
Ms. Sheinbaum said the fentanyl scourge was “a problem of public health and consumption in your country’s society.” She also said too many weapons are smuggled into her country from the U.S.
Liu Pengyu, a spokesman for the Chinese embassy in the U.S., said that “no one will win a trade war or a tariff war,” a response to Mr. Trump’s threat to levy an additional 10% tariff on all goods from China.
Mr. Trump is angry because China produces many of the precursor chemicals for fentanyl. A new tariff would come on top of duties imposed during the first Trump administration, some of which were kept in place by President Biden.
Mr. Liu 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 said he 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.
“We talked about some of the challenges we can work on together. It was a good call. This is something we can do,” he told Canadian media.
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Canadian Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc said they are committed to border security and that the U.S.-Canada trade relationship is mutually beneficial, “particularly for American workers.”
“Canada is essential to U.S. domestic energy supply, and last year 60% of U.S. crude oil imports originated in Canada,” they said.
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 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.
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.”
Rep. Glenn Grothman, Wisconsin Republican, said Mr. Trump’s decision to “play hardball” would save lives.
“These proposed tariffs will not only hold these countries accountable but also strengthen the U.S. economy by ensuring that our borders are secure and our communities are protected. This is a start to reducing crime and saving American culture,” said Mr. Grothman, the chairman of the House Oversight Subcommittee on National Security, the Border and Foreign Affairs. “With these economic actions, the U.S. will no longer be a haven for criminals and drug traffickers, but rather a nation where law and order prevail, and the well-being of its citizens is prioritized.”
While GOP allies cheer Mr. Trump’s tactics, some business lobbies and trade groups warned of domestic pain if Mr. Trump follows through.
The National Foreign Trade Council said the tariff threat would violate the United States-Mexico-Canada Agreement that Mr. Trump negotiated the last time he occupied the White House.
“While we’re all familiar with the president-elect’s fondness for tariffs as a negotiating tool, it’s particularly troubling that he’s threatening to aim them at America’s closest allies and trading partners on the very first day of his administration,” NFTC President Jake Colvin said.
The National Retail Federation said there is a “time and place” for tariffs to protect U.S. industries but that blanket tariffs will backfire.
“Voters spoke loud and clear that higher prices and inflation are their chief economic concerns. But lower prices and increased tariffs are mutually exclusive,” the federation said in a written statement on Tuesday. “Broad-based, across-the-board tariffs will drive up prices and put more pressure on family finances just when we are finally turning the corner on the inflation fight.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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