Canadian Prime Minister Justin Trudeau reportedly responded quickly to newly-elected US President Donald Trump’s threat to impose tariffs on Mexican, Canadian and Chinese goods as global currencies plummeted.
The new president posted on his Truth Social platform Monday night that he would impose a 25 percent tariff on Mexican and Canadian goods as long as the countries continue to allow immigrants to cross the U.S. border.
He also said he would impose an additional 10 percent tariff on Chinese goods, due to the Chinese government’s refusal to keep a promise to use the death penalty on drug dealers.
These actions, Trump said, would take place on the first day of his administration, noting that the tariffs on Mexican and Canadian imports would apply to “ALL products entering the United States, and its ridiculously open borders.”
“This tariff will remain in effect until drugs, especially Fentanyl, and all illegal aliens stop this invasion of our country!”
Trump also suggested that Mexico and Canada had “the absolute right and power to easily resolve this long-dormant problem” — signaling that he wanted the neighbors to do more to patrol their borders so that migrants don’t cross the border. could sneak into the United States amid yet another migrant caravan. .
Just two hours after Trump posted the threats, Trudeau called Trump at his Mar-a-Lago estate, and the two had a constructive conversation focused on trade and border security, an unidentified Canadian official with knowledge of the call said. told the New York Times.
The Canadian government subsequently released a statement emphasizing the deep ties between the U.S. and Canadian economies.
Justin Trudeau called newly elected President Donald Trump just two hours after he threatened to impose tariffs on Canada on Monday evening
Former President Donald Trump is photographed standing in front of the border wall during his re-election bid in August. The now president-elect has vowed to impose a 25 percent tariff on Mexico and Canada, suggesting they should be the ones to curb border crossings
“Canada is essential to America’s domestic energy supply and last year 60 percent of US crude oil imports came from Canada,” said the statement from Trudeau, Finance Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.
“We will of course continue to discuss these issues with the new government.”
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association – a Canadian industry group – also said he believed Trump’s posts were just a way to open negotiations that would ultimately strengthen Canada and the US as allies in the fight against China .
“Half of the cars made in China are made by American companies, and half of the parts used in all cars made in Canada come from American suppliers, and more than half of the raw materials come from from American sources,” Volpe noted.
‘We are more than partners. We’re almost as inseparable as family.’
Ontario Premier Doug Ford added in a social media post that “a 25 per cent tariff would be devastating to workers and jobs in both Canada and the US.”
“The federal government must take the situation at our border seriously,” he said. “We need a Team Canada approach and response – and we need it now.
“Prime Minister Trudeau should hold an urgent meeting with all the prime ministers,” he suggested.
Canadian officials have praised the strong economic relationship between the U.S. and Canada
Meanwhile, Mexican officials have not yet commented on Trump’s threat.
But they have previously indicated they are prepared to respond with their own retaliatory tariffs.
“If you impose 25 percent tariffs on me, I have to respond with tariffs,” Marcelo Ebrard, Mexico’s economy minister, said. said a radio interviewer earlier this month.
Mexico, China and Canada account for well over a third of the goods and services both imported and exported by the US, supporting tens of millions of American jobs.
The three countries combined also purchased more than $1 trillion in U.S. exports in 2023 and supplied nearly $1.5 trillion in goods and services to the U.S. in 2023.
Imposing a 25 percent tariff on Canada and Mexico would also violate the United States-Mexico-Canada Agreement that Trump himself signed in 2020, leading some to wonder if Trump’s messages were just a negotiating tactic.
As such, the Chinese embassy in Washington DC warned that ‘no one will win a trade war’ as it responded to Trump’s claims that the deadly drug fentanyl was still seeping into the US from China.
“The Chinese side has informed the US side of the progress made in US law enforcement operations against narcotics,” said Liu Pengyu, a spokesperson for the Chinese embassy in DC. The Guardian reports this.
“All this proves that the idea that China is knowingly allowing fentanyl precursors to flow into the United States is completely at odds with the facts and reality.
“China believes that economic and trade cooperation between China and the US is mutually beneficial.”
Trump suggested the tariffs would remain in place as long as Mexico and Canada continue to allow immigrants to flow across the U.S. border.
But the tariff announcement has already caused the Chinese yuan to fall against the US dollar to its weakest point in almost four months, falling 0.3 percent to 7.2730 per dollar on the news.
The Mexican and Canadian currencies also fell about one percent each, while the U.S. dollar appreciated against all but the yen in Asian trading.
“Risk sentiment is being crushed for now due to Trump’s tariff risks – the dollar is seen as a haven and the currencies of affected countries, such as the Mexican peso, are being hammered,” said Mingze Wu, foreign exchange trader at StoneX Financial. told Bloomberg.
‘This may just be a taste of what is to come.”