President-elect Trump announced plans to impose a flat 25% tariff on all imports from Canada and Mexico on his first day in office. However, one expert said the move was primarily a “diplomatic” move, using Trump's “war chest” to exploit U.S. national interests.
Tariffs are taxes imposed by governments on goods that are imported or exported. They can raise the price of imported goods and make local products more attractive to buy.
“President Trump has used tariffs effectively in the past, and he will continue to target tariffs in areas not directly related to trade,” Andrew Hale, senior policy analyst at the Heritage Foundation, told Fox News Digital. We can expect that they will continue to utilize it in a limited manner.” .
Scenes at the southern border and President-elect Trump (Getty Images)
Hale noted that President Trump's previous tariffs were aimed not just at trade imbalances, but also at issues such as border security and drug trafficking. Hale said President Trump has consistently applied these tariffs beyond trade imbalances and used them as a diplomatic tool to advance his “America First” policy.
“Trump continues to assert American power on the world stage, but the Biden administration is reluctant to do so, allies and adversaries alike are taking notice, and Trump's return will restore American leadership. I call it that.”
Hale indicated that Mexico and Canada may challenge President Trump's tariff proposals under the USMCA if they go into effect, but such measures are unlikely to be effective in achieving U.S. goals. He said he doubted it would ever get to that point, given what has been proven so far. Hale also speculated that President Trump could use tariffs as leverage in other situations, such as targeting countries that act against U.S. allies like Israel.
“I don't think it'll go that far because it's working effectively,” he said.
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Migrants climb a wall from Tijuana, Mexico, seeking asylum in the United States on June 7, 2024. (Carlos Moreno/Anadolu via Getty Images)
During his first term, President Trump renegotiated the North American Free Trade Agreement (NAFTA) and replaced it with the United States-Mexico-Canada Agreement (USMCA), which went into effect in July 2020. USMCA was intended to modernize and address the original problems. NAFTA, particularly regarding labor rights, environmental standards, and digital trade.
“I'm going to let her know. [Mexican President Claudia Sheinbaum] If we don't stop the onslaught of criminals and drugs coming into our country on day one or sooner, we will immediately impose 25% tariffs on everything they bring into our country,” President Trump said. He said this during his last campaign in North Carolina before the election.
Hale said President Trump successfully imposed tariffs in the USMCA renegotiations with Canada and Mexico, at a time when President Trump has criticized both countries over issues such as trade imbalances and drug trafficking to justify tariffs. He added that this proves the power of using tariffs as a diplomatic tool.
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Chinese President Xi Jinping attends a meeting with Brazilian President Luiz Inacio Lula da Silva in Brasilia, November 20, 2024. (Reuters/Adriano Machado)
“The Biden administration is not properly implementing the USMCA because Mexico is violating it,” Hale said.
The tariffs are aimed at boosting U.S. manufacturing, but experts and some politicians say they will disrupt supply chains, increase costs for companies that rely on foreign goods and threaten retaliation from trading partners. It warns that it could lead to tariffs and impact U.S. exporters.
On Thursday, California Governor Gavin Newsom, a liberal, criticized President Trump's proposal, calling it “one of the largest tax increases in American history.”
“You are being betrayed by these policies,” Newsom said.
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According to the Tax Foundation, the Trump administration imposed tariffs on $380 billion worth of products in 2018 and 2019, imposing approximately “$80 billion worth of new taxes” on Americans.
The Biden administration largely kept those tariffs in place, then implemented additional tax increases on $18 billion worth of Chinese goods.
Former Vice President Mike Pence expressed support for President Trump's tariffs, but urged him to take a cautious approach to balancing relations with China.
“I very much hope that his proposed tariffs will bring China back to the negotiating table, just as it did during our administration, although I know this will be difficult and create challenges in the short term. It will be worth it in the long run,” Pence said this week. “We want a better situation for the United States and China, and I believe the best way to get there is with a firm and fair approach.”
President Trump also recently told Canadian Prime Minister Justin Trudeau that if tariffs due to his failure to address trade and immigration issues will destroy the economy of our neighbor to the north, perhaps we should become the 51st state. sources told Fox News.
Mr. Trump has become more aggressive about the U.S. trade deficit with Canada, which he estimates at more than $100 billion, officials said.
Fox News Digital's Caitlin McFall, Greg Wehner and Bret Baier contributed to this report.
