The United States’ neighbors seem eager to avoid a major trade-and-tariff standoff with Washington as Donald Trump returns to the White House, but Beijing is readying for round two after trading blows with the Republican president during his first administration.
Though Trump has long expressed support for tariffs, he set off an international firestorm this week with his Day One plans to shake up trade relations with key economic partners.
“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,” Trump announced this week.
Trump overthrew Republican free trade orthodoxy during the 2016 primary, criticizing foreign trade practices for which he blamed the outsourcing of American jobs.
His first administration witnessed the renegotiation of key trade deals with neighboring nations, notably the United States-Mexico-Canada Agreement (USMCA) that replaced the old North American Free Trade Agreement (NAFTA).
He also attempted trade negotiations with China and imposed tariffs on several major industries, though his efforts did not result in the same sort of landmark trade agreement as with Mexico and Canada.
On the 2024 campaign trail, Trump made tariffs a central fixture of his economic pitch, vowing to win back American jobs and bolster domestic production through taxes on foreign imports. He also promised to use them as leverage to secure cooperation from other nations on key issues like immigration. Here’s a look at how America’s trade partners are responding to his plans.
Mexico
While there appears to be some disagreement between Trump and his Mexican counterpart over the state of their negotiations, both have deemed their recent talks as productive and indicated that they were prepared to work closely with one another.
Despite Trump’s support for strict immigration and tariff policies during his first term, he generally enjoyed a strong relationship with former Mexican President Andres Manuel Lopez Obrador.
Current Mexican leader Claudia Sheinbaum, however, initially expressed skepticism about Trump’s tariffs plans and suggested they would lead to a direct trade war.
“One tariff would be followed by another in response, and so on until we put at risk common businesses,” she said earlier this week. But the pair spoke privately within days and both suggested there was room for discussion.
Trump posted Thursday on Truth Social: “Just had a wonderful conversation with the new President of Mexico, Claudia Sheinbaum Pardo. She has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border. We also talked about what can be done to stop the massive drug inflow into the United States, and also, U.S. consumption of these drugs. It was a very productive conversation!”
Sheinbaum disputed that she had made any material commitments but that the pair had discussed immigration and drug trafficking and that tariffs had come up in that context.
“It was a good conversation and we are going to keep having conversations,” she said. “Mexico’s stance is not to close borders, but to build bridges between governments and their peoples.”
Canada
Canadian Prime Minister Justin Trudeau on Friday night unexpectedly flew to Trump’s Mar-a-Lago resort home in Florida to talk with him, amid the tariff threat.
On Tuesday, Trudeau quickly called Trump after the tariff post to discuss his plans.
Trudeau’s government has faced abysmal polling numbers amid widespread economic discontent and frustration over his immigration policies. Some surveys have suggested his Liberal Party faces an electoral wipeout when voters go to the polls and a trade war with the United States could see its prospects fade even further.
“We obviously talked about laying out the facts, talking about how the intense and effective connections between our two countries flow back and forth,” Trudeau said Tuesday.
Though not typically viewed as a major factor in the United States’ immigration surge, Canada shares with America the largest undefended border in the world. Ottawa’s own lax immigration policies have contributed, moreover, not just to Trudeau’s low polling numbers, but the security situation for the U.S.
During fiscal 2024, U.S. Customs and Border Protection reported a record 198,929 encounters with and apprehensions of illegal border crossers along the Canadian frontier. Among those apprehended were individuals from 97 different countries.
Though border security is a significant factor in Washington’s relationship with Ottawa, Canada’s economy is not without some industrial weight of its own and Trump’s primary concern with tariffs seems to be foreign imports.
Earlier this year, Trudeau embraced tariffs on Chinese electric vehicle imports, as well as steel and other goods. His move followed the U.S. imposing a similar tariff and could signal a willingness from Canada to cooperate with Trump on his oriental efforts.
China
While Canada and Mexico appear at least willing to engage with Trump on his trade and border initiatives, China, the main object of Trump’s ire, is evidently adopting a more bellicose approach to the Republican’s return.
“Imposing arbitrary tariffs on trading partners will not solve America’s own problems,” Chinese Commerce Ministry spokesperson He Yadong told reporters.
China is already subject to some import tariffs, as Trump’s trade policy pivot carried over to the Biden administration to a degree. In announcing the tariffs this week, Trump further singled out Beijing for additional scrutiny if it did not crack down on the export of fentanyl and other drugs.
“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,” Trump declared, observing that his move followed failed discussions with China to convince them to crack down.
Chinese state-linked media has roundly criticized Trump’s tariff plans, with some suggesting they would backfire and hurt U.S. companies that do business with China.
“U.S. politicians need to pay attention to and respect the evident willingness of American businesses for economic and trade cooperation by tailoring suitable policy environments for enterprises,” wrote the state-controlled Global Times.
China has become an industrial superpower in recent decades, drawing in American companies across all industries, in part due to lower operating and labor costs.
Trump’s first tariff efforts against China saw Washington scrutinize Chinese state-linked firms such as TikTok operator ByteDance, which he attempted to ban.
Hawkish attitudes toward Chinese firms gradually permeated throughout Capitol Hill and Congress ultimately approved a so-called “TikTok ban” that faces legal challenges. The fate of the popular social media app is likely to prove one of the first flashpoints in a renewed trade war.