On Tuesday, officials from China, Mexico, and Canada criticized a recent announcement by President-elect Donald Trump, who took to social media to declare his intention to impose new tariffs on these key trade partners starting on his first day in office.

Trump’s plan, which seems to breach the trade agreement he ratified in 2020, is purportedly targeted at curbing the influx of illegal drugs — particularly fentanyl — and reducing illegal immigration into the U.S.

He stated that upon taking office, he would enact a 25% tariff on all goods from Canada and Mexico, and a 10% tariff on imports from China.

Trump’s inauguration is set for January 20, 2025.

In a post on Truth Social, a platform he owns, Trump asserted, “Mexico and Canada are capable of resolving this longstanding issue.” He added, “It’s time they face a hefty price!” In a separate message, he accused China of allowing fentanyl smuggling aimed at the U.S.

Immediate backlash followed from all three nations.

Liu Pengyu, a spokesperson for the Chinese embassy in Washington, remarked, “No one wins in a trade war” and insisted that “the notion that China willingly permits fentanyl precursors to enter the U.S. contradicts the facts and realities.”

Mexico’s finance department responded, highlighting that the U.S.-Mexico-Canada Agreement (USMCA), which Trump backed during his first term, guarantees “certainty” for investors. President Claudia Sheinbaum cautioned that imposing one tariff would provoke retaliatory measures, potentially jeopardizing businesses they share, like General Motors and Ford. Sheinbaum disclosed her comments in a letter sent to Trump during a press briefing.

Doug Ford, the premier of Ontario, expressed that the tariffs could severely impact jobs in both the U.S. and Canada.

A tariff acts like a tax applied by one country on imported goods and services from another country. According to the U.S. Energy Information Administration, oil is the primary import from Canada, while cars and automotive components rank as the largest category of goods coming from Mexico. The U.S. also imports substantial amounts of electronics from China. Certain items benefit from exemptions due to the USMCA.

During his first term, Trump frequently leveraged trade threats as a negotiation strategy, imposing tariffs on billions of dollars worth of Chinese goods. His aim was to negotiate a new trade agreement with China, which fell apart due to the COVID-19 pandemic in 2020.

It remains uncertain whether Trump will commit to his pledge of new tariffs.

However, the imposition of tariffs on U.S. trading partners was a key aspect of Trump’s economic policy detailed during his presidential campaign. He seems to believe that these tariffs will safeguard U.S. jobs, increase tax income, and stimulate a domestic manufacturing boom. Yet, many economists warn that such tariffs can drive up inflation and lead to increased interest rates.

Ultimately, importers, not the exporting countries, bear the cost of tariffs. Typically, these costs get passed along to consumers, resulting in higher prices for products.

“Trump was elected to lower the price of groceries. This approach, along with deportations, will hugely inflate grocery prices,” remarked Bill Penzey, owner of Penzeys Spices, prior to Trump’s announcement.

Trump has also indicated that once in office, he plans to declare a national emergency and deploy military resources to deport illegal immigrants.

“You can’t substitute California Garlic for Chinese Garlic when all the skilled labor in the California Garlic industry has been deported,” said Penzey, a consistent critic of Trump.

Andrew Law, founder of The Mexico Brief, posited that Trump’s announcement is more politically motivated than economically driven.

“The timing of the announcement follows a diplomatic spat between Mexico and Canada regarding Chinese imports, leading Mexico to rush a law substituting certain Chinese parts with domestic alternatives. Trump is using this opportunity to edge China out of America’s influence,” Law explained in Tuesday’s commentary.

“This isn’t just a policy note; it’s a tactic to—further aggravate tensions among our allies. The objective? To extract more compromises from Mexico and Canada concerning China. It’s a provocation designed to see how parties react. It’s likely to be effective.”