Trump Threatens 25% Tariff on Canada and Mexico, Potentially Crippling Trade

President-elect Donald Trump said Monday that he would impose a 25% tariff on all products coming into the United States from Canada and Mexico on his first day in office, a move that would scramble North American supply chains and impose heavy costs on businesses around the continent.

In a post on Truth Social, Trump mentioned a caravan of migrants making its way to the United States from Mexico, and said he would levy the tariff by executive order until drugs and migrants stopped coming over the border.

“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” the president-elect wrote.

“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem,” he added. “We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!”

In a separate post, Trump also threatened an additional 10% tariff on all products from China, saying that the country was shipping illegal drugs to the United States.

“Representatives of China told me that they would institute their maximum penalty, that of death, for any drug dealers caught doing this but, unfortunately, they never followed through, and drugs are pouring into our Country, mostly through Mexico, at levels never seen before,” he said.

The tariffs would have dramatic implications for American industries, including auto manufacturers, farmers and food packagers, which busily ship parts, materials and finished goods across U.S. borders.

The costs could be particularly high for the industries that depend on an integrated North American market. Adding 25% to the price of imported products could make many too costly, potentially crippling trade around the continent. That in turn could cause spiking prices and shortages for consumers in the United States and elsewhere.

Trump imposed high tariffs during his first term in office, which began in 2017, including levies of up to 25% on global metals and a variety of products from China.

In 2019, he threatened to impose tariffs on all products from Mexico and shut down the border entirely unless the country halted illegal immigration. But he was persuaded to walk away from the moves.

While campaigning for a second term in office, Trump made even more aggressive tariff threats, including suggesting that he would impose a levy of 60% or more on Chinese goods and tariffs of 10% to 20% on those from other countries.

Mexico, China and Canada are America’s three largest trading partners, gobbling up $830 billion of U.S. exports in 2022.

This article originally appeared in The New York Times.