Officials from Mexico, Canada, and China have voiced strong concerns over U.S. President-elect Donald Trump’s proposal to impose sweeping tariffs on goods from these major trading partners. The officials warned that such measures could harm all involved economies, fueling inflation, disrupting job markets, and destabilizing global trade.

Read also: “Tariffs Are on the Table for U.S. Importers, Whatever the Election Outcome” 

The tariffs, announced on Monday, include a 25% levy on imports from Canada and Mexico and an additional 10% on Chinese goods. Trump cited the need to combat illicit drug flows and tighten border controls as key drivers behind the move. Leaders from the affected nations urged dialogue to prevent economic disruption.

Mexican President Claudia Sheinbaum expressed her concerns during a press conference, stating, “One tariff will lead to another, putting our shared businesses at risk.” Sheinbaum intends to address the issue directly with Trump in a letter and a planned call.

Similarly, Rhys Mendes, Deputy Governor of the Bank of Canada, warned of the bilateral impact of such tariffs. “What happens in the U.S. has a significant effect on us, and this would undoubtedly ripple across both economies,” Mendes said during a public event in Charlottetown, Prince Edward Island.

A spokesperson for China’s embassy in Washington echoed these sentiments, stating, “No one wins in a trade or tariff war.”

Trade Tensions and Economic Risks

The three countries shipped over $1 trillion worth of goods to the U.S. in the first nine months of the year, according to U.S. Commerce Department data. Mexico, China, and Canada rank as the top three U.S. trading partners, highlighting the high stakes of these proposed tariffs.

Trump has justified the measures as part of his broader “America First” agenda. His first term saw similar tariff threats, including a 5% levy on Mexican goods in 2019 to pressure Mexico on immigration control. This time, Trump has added the opioid crisis, particularly fentanyl smuggling, as a major grievance.

While the Centers for Disease Control and Prevention reported a decline in U.S. fentanyl overdose deaths in 2023, the number remains staggering, with nearly 75,000 fatalities.

USMCA and Legal Hurdles

Critics argue that Trump’s tariff threats could violate the U.S.-Mexico-Canada Agreement (USMCA), which ensures largely duty-free trade between the three nations. The agreement, signed into law by Trump, remains in effect until 2026. However, legal experts warn that Trump could bypass such restrictions by invoking a national emergency under the International Emergency Economic Powers Act.

Warren Murayama, a former general counsel for the U.S. Trade Representative, noted, “If precedent is any guide, challenging such actions will be an uphill battle.”

Market Reactions

The announcement caused the Mexican peso and Canadian dollar to tumble, while U.S. stock markets appeared largely unshaken. Some economists see Trump’s tariffs as a negotiation tactic rather than a definitive policy.

“This appears to be a leverage tool, not a revenue-raising strategy,” said Thomas Ryan, North America Economist at Capital Economics. “It leaves room for Canada and Mexico to present credible plans over the next two months to avert these tariffs.”

Despite the uncertainty, industries reliant on cross-border trade, including automakers, have already felt the impact, with shares in companies like Ford and General Motors experiencing sharp declines.

The coming weeks are likely to test the resilience of U.S. trade relationships as negotiations unfold. Whether Trump’s rhetoric will translate into action remains to be seen, but the threat has already sparked concerns over the future of global trade stability.