In Social Media Posts, Trump Threatens Tariffs on Mexico, Canada and China

On Monday evening, president-elect Donald Trump announced that he would impose steep tariffs on the U.S.’s top three trading partners — fees that will invariably raise consumer prices, effectively amounting to a regressive sales tax for most Americans.

Trump justified the tariffs by claiming they were meant to compel the three countries — Canada, Mexico and China — to address drug trafficking to the U.S. Trump’s statement addressed Canada and Mexico separately from China, saying that the tariffs would remain in place until those two countries changed their immigration policies.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States,” Trump wrote in the first of his two Truth Social posts on the subject, adding that the punitive tariffs would “remain in effect” until an unspecified amount of drugs stops entering the country and immigration comes to a halt.

“Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem,” Trump said. “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 his second post, Trump focused on China, saying that he would charge that country “an additional 10% Tariff” above what they are currently paying.

Mexican President Claudia Sheinbaum reacted to Trump’s social media posts by suggesting that her country could impose tariffs of its own on U.S.-made goods.

“One tariff will be followed by another in response,” Sheinbaum said, noting that a trade war between the two countries would put common companies “in risk.”

Notably, tariffs affect consumers much more than the countries they’re imposed on. That’s because companies that sell products to the U.S. raise the prices of those products when tariffs are implemented, which in turn leads to higher prices on the shelves of marketplaces — essentially, tariffs become a tax on American consumers rather than the penalty on other countries that Trump makes them out to be.

An examination of Trump’s tax policy during the presidential campaign found that the vast majority of Americans would see their taxes increased under his presidency, due largely to his proposed tariffs — save for the wealthiest 5 percent of wage earners in the U.S., who would receive enormous tax cuts under Trump’s plan.

Those proposed tariffs would act as a regressive tax on American consumers, meaning those with smaller incomes would pay a higher rate of taxes. The middle 20 percent of wage earners, for example, would expect to see a 2.1 percent tax increase if Trump’s tariffs were implemented, while those earning the lowest 20 percent wages would see a 4.8 percent tax increase.

Several retailers, including C-level executives from Walmart, AutoZone, Black & Decker and others, have acknowledged that consumers would be paying more for products sold at their stores if Trump’s tariffs are implemented.

“Obviously, coming out of the gate, there would be price increases associated with tariffs that we put into the market,” Black & Decker CEO Donald Allan Jr. said recently.