Trump promises to fight drugs from his first day in office. What the media is saying
US President-elect Donald Trump has promised to impose import duties on the day of his inauguration. He intends to impose 25 percent tariffs on goods from Canada and Mexico, as well as increase the existing tariffs for China by 10 percent. What consequences the media expect for the American and global economy - in the Izvestia digest.
Associated Press: Trump is fighting the supply of the drug fentanyl
Trump announced on the social network Truth Social that he will impose a 25 percent tax on all products imported into the country from Canada and Mexico as one of his first executive orders. He justified his decision by fighting illegal migration and the supply of the drug fentanyl, which has led to mass overdose deaths in the United States.
Associated Press
"Both Mexico and Canada have the absolute right and power to easily address this long-standing problem. We hereby demand that they use that power," he reported, "And until they do, it is time for them to pay a very heavy price!"
Trump will also impose an additional 10 percent tariff on goods from China, also justified on the grounds of fighting the influx of drugs. According to the politician, negotiations with Beijing to curb drug trafficking have gone nowhere.
Bloomberg: markets react to Trump's statements
Trump's statements came as a surprise to the market. Before the election, he actually promised to raise duties to 60% on Chinese goods and 20% on all others. Thus he wanted to return jobs to Americans and increase budget revenues. But later on, Trump offered the post of Treasury Secretary Scott Bessent to be perceived as a softening of tariff policy.
Bloomberg
The Republican has long said he favors tariffs as a negotiating tool, even with U.S. partners, and during the 2024 presidential campaign he pondered replacing the federal income tax with revenue from trade fees. However, most mainstream economists warned that Trump's levies would raise prices for consumers, spurring already high inflation and diverting or reducing trade flows.
The Canadian dollar fell to a four-year low after Trump's announcement. The Mexican peso traded near lows since 2022. The Chinese yuan was also affected by the fall. The high tariffs on Canada and Mexico are expected to hurt the auto industry and other consumer sectors, including food, in which the three countries are closely integrated.
The New York Times: what will be the consequences of the tariffs
The threats to impose duties have sounded like an ultimatum against three of the United States' biggest trading partners. They are already threatening diplomatic and economic repercussions for Washington. Mexico, China and Canada together buy $1 trillion worth of goods from the U.S., but could now impose retaliatory tariffs, potentially paralyzing trade on the continent.
The New York Times
That could cause price hikes and shortages for consumers in the United States and elsewhere, in addition to bankruptcies and job losses. Trump has insisted that foreign companies pay the duties, but they are actually paid by the company that imports the products, and in many cases passed on to American consumers.
The U.S. tariffs could send a shock to Mexico's economy, which depends on trade, exporting about 80 percent of its goods to its northern neighbor. In Canada, job losses are predicted as tariffs rise. There, they note that Trump's plans will have a negative impact on the U.S. itself, as U.S. goods will not be able to compete with Chinese goods in the global market.
Reuters: China does not agree with the increase in tariffs
The Chinese embassy in the US expressed disagreement with Trump's intentions to add 10% to the already existing duties on Chinese goods. The diplomatic mission expressed readiness to jointly fight the supply of chemicals for the production of fentanyl, with which Trump justified the tariff hike.
Reuters
"Regarding the issue of U.S. duties on China, China believes that Sino-U.S. trade and economic cooperation is inherently mutually beneficial," Chinese Embassy spokesman Liu Pengyu said. - No one wins a trade war or tariff war."
The diplomat said China has already taken steps to combat drug trafficking after an agreement was reached between President Joe Biden and Chinese President Xi Jinping in 2023. China's attorney general has urged law enforcement agencies to focus on the fight against drugs, and authorities have also tightened trafficking in three chemicals needed to produce fentanyl.
CNN: what the U.S. imports from Canada, Mexico and China
The main commodity imported to the US from Canada is oil. Its volume reached 4.3 million barrels per day in July 2024. America also buys automobiles, machinery, plastics and timber. From Mexico, the U.S. gets most of its cars and parts, electronics, oil, optical instruments, furniture and alcohol.
CNN
Many U.S. imports from Canada and Mexico are exempt from tariffs because of a trade agreement between the three countries that Trump promoted during his first administration. It's unclear how Trump plans to implement the proposed tariffs without violating the agreement.
The U.S. imports a significant amount of electronics, appliances, toys, sports equipment, furniture and plastics from China. During his first term, Trump already imposed tariffs on China, which covered thousands of types of goods worth $380 billion. According to economists, the new duties will cost each American household $2600 a year.
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