President-elect Trump announced plans to impose a blanket 25% tariff on all imports from Canada and Mexico starting on its first day in office. But the move is largely “a diplomatic” move, using Trump’s “war chest” to leverage US interests, one expert said.
Rates are taxes that governments levy on goods that are imported or exported. They can increase the cost of imported products, making local products more attractive to buy.
“President Trump has used tariffs effectively before, and I think we can expect him to continue to use them in a targeted way, even in areas not directly related to trade,” Andrew Hale, senior policy analyst at the Heritage Foundation, to Fox News Digital. .
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The scene at the southern border and President-elect Trump (Getty Images)
Hale noted that Trump’s past use of tariffs has not only targeted trade imbalances, but also issues such as border security and drug trafficking. According to Hale, Trump has consistently applied these tariffs to areas beyond trade imbalances, using them as tools of diplomacy to advance “America First” policies.
“Trump continues to assert American strength on the world stage, something the Biden administration has been reluctant to do, and allies and adversaries alike have taken notice, in what I would call a resurgence of American leadership with Trump’s return,” said he.
Hale suggested that if it was Trump’s tariff proposals If such measures are implemented, Mexico and Canada could challenge them under the USMCA, but he doubts that this stage will be reached as such measures have previously proven effective in achieving US objectives. Hale also speculates that Trump could use tariffs as leverage in other contexts, such as targeting countries that act against US allies like Israel.
“I don’t see it going that far because it has worked effectively,” he said.
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Migrants climb the wall to seek asylum in the United States from Tijuana, Mexico, on June 7, 2024. (Carlos Moreno/Anadolu via Getty Images)
During his first term, Trump renegotiated the North American Free Trade Agreement (NAFTA) and replaced it with the United States-Mexico-Canada Agreement (USMCA), which came into effect in July 2020. The USMCA aimed to modernize and address issues in the original version. NAFTA, especially in the areas of labor rights, environmental standards and digital trade.
“I’m going to inform her (Mexican President Claudia Sheinbaum) on day one, if not sooner, that if they don’t stop this onslaught of criminals and drugs coming into our country, I’m going to immediately impose a 25% tariff. on everything they send to the United States of America,” Trump said during his final campaign stop in North Carolina before the election.
Hale added that Trump’s success in using tariffs during the USMCA renegotiations with Canada and Mexico demonstrates their power as a diplomatic tool, as Trump has criticized the countries for trade imbalances and issues such as drug trafficking as justification for the tariffs.
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Chinese President Xi Jinping attends a meeting with Brazilian President Luiz Inacio Lula da Silva in Brasilia, November 20, 2024. (Reuters/Adriano Machado)
“The Biden administration has not implemented USMCA as it should be because Mexico violated it,” Hale said.
While the tariffs are intended to boost U.S. manufacturing, experts and some politicians warn they could disrupt supply chains, raise costs for companies dependent on foreign goods, and potentially trigger retaliatory tariffs from trading partners, impacting U.S. exporters.
Thursday Liberal Gov. Gavin Newsom from California took aim at Trump’s proposal, calling it “one of the largest tax increases in American history.”
“You are being betrayed by this policy,” Newsom said.
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According to the Tax Foundation, the Trump administration imposed “$80 billion in new taxes on Americans” in 2018 and 2019 when he imposed tariffs on $380 billion worth of products.
The Biden administration largely kept these tariffs in place and then imposed additional tax hikes on $18 billion worth of Chinese goods.
Former Vice President Mike Pence spoke out in support of Trump’s tariffs but urged a delicate approach to balancing the country’s relationship with Beijing.
“I fervently hope that his proposed tariffs will bring China back to the negotiating table, as they did during our administration. I know this will be difficult and present challenges in the short term, but in the long run it will be well worth it. Pence said this week. “We want better for America and China – and I believe a firm but fair approach is the best way to get there.”
Trump also recently suggested to Canadian Prime Minister Justin Trudeau that if a tariff for failing to address trade and immigration issues would kill the northern economy’s neighbor, perhaps it should become the 51st state, sources told Fox News.
Sources say Trump became more animated when it came to the U.S. trade deficit with Canada, which he estimated at more than $100 billion.
Fox News Digital’s Caitlin McFall, Greg Wehner and Bret Baier contributed to this report.
