Trump Escalates Trade War: New Tariffs on Mexico, Canada, and China Spark Economic and Diplomatic Tensions Over Fentanyl Crisis
WASHINGTON— U.S President Donald Trump announced on Thursday that his proposed 25% tariffs on Mexican and Canadian goods will take effect on Tuesday, alongside an additional 10% duty on Chinese imports. The move, aimed at combating the influx of deadly fentanyl into the U.S., marks a significant escalation in trade tensions.
The new tariffs on China, which come on top of a 10% duty imposed on February 4, coincide with China’s annual parliamentary meetings, where Beijing is set to outline its key economic priorities for 2025. The announcement leaves China with less than a week to respond with countermeasures, further straining U.S.-China relations.
Trump’s Tough Stance on Trade
Trump defended his decision to impose the tariffs, citing what his administration perceives as insufficient progress from China, Mexico, and Canada in curbing fentanyl smuggling into the U.S.
“There are ongoing discussions with China, Mexico, and Canada,”
a White House official told Reporters.
“While we’ve made progress on migration issues, fentanyl-related deaths remain a critical concern.”
The fentanyl crisis has been devastating in the U.S., with the Centers for Disease Control reporting 72,776 deaths from synthetic opioids in 2023. In January 2025 alone, Customs and Border Patrol agents seized 991 pounds of fentanyl at the southwest border—down 50.5% from a year earlier but still enough to pose a severe threat.
U.S.-China Trade War?
Trump’s tariff escalation mirrors his first-term trade war tactics with China, raising concerns over a potential economic decoupling. As trade talks remain stalled, the White House has intensified its scrutiny of Chinese investments in U.S. firms, citing national security risks.
Last Friday, the administration released an “America First” investment memo, labeling China a “foreign adversary” and accusing it of using U.S. investments to steal advanced technology and bolster its military. The U.S. is also reviewing the variable interest entity (VIE) structure, which allows hundreds of Chinese firms to be listed on American stock exchanges—potentially forcing them to delist, a move that could wipe out $848 billion from U.S. markets.
China has yet to engage in direct negotiations over fentanyl, instead retaliating with limited 10% duties on U.S. energy and farm equipment. With U.S. imports from China totaling $439 billion last year, additional tariffs could significantly impact both economies, exacerbating China’s economic struggles and keeping U.S. inflation elevated.
Trump Downplays Inflation Fears
Despite concerns that tariffs could drive up prices for American consumers, Trump dismissed the inflationary risks, arguing that tariffs in his first term generated “hundreds of billions of dollars” without harming the economy.
“I find that it’s not about inflation. It’s about fairness. And the inflation for us has not existed, and I don’t think it’s going to exist,”
Trump said in a Thursday news conference.
Mexico, Canada Scramble for Trade Talks
Mexican and Canadian officials are scrambling to negotiate with the Trump administration before the tariffs take effect. Meetings were scheduled for Thursday and Friday in Washington, where Mexico’s Economy Minister Marcelo Ebrard was set to discuss alternatives with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.
Meanwhile, Canadian Public Safety Minister David McGuinty expressed optimism that Canada’s increased efforts to secure its border and combat drug smuggling should satisfy the U.S. administration.
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