This proposal drew immediate reactions from all three countries:
- China responded that “no one will win a trade war,” emphasizing that the relationship between China and the US is mutually beneficial.
- Canada called its trade relationship with the US “essential,” particularly in terms of energy supplies, and urged continued discussions with the incoming administration.
Trump’s trade policy, characterized by aggressive tariffs, was a key part of his first term, with significant duties imposed on Chinese goods, as well as Mexico and Canada. He had previously cited unfair trade practices and intellectual property theft as reasons for such tariffs.
Economists have warned that these tariffs could hurt economic growth and lead to higher inflation. However, Trump’s advisors have argued that the tariffs are essential bargaining tools to secure better trade deals and bring manufacturing jobs back to the US.
Trump’s new commerce secretary designate, Howard Lutnick, a noted China hawk, has supported high tariffs, including a 60% tariff on Chinese goods and a 10% tariff on all other imports.
Many analysts and former trade officials have suggested that Trump’s approach is classic negotiation strategy: threatening high tariffs and then negotiating terms. However, some expect that tariffs on Chinese goods might be easier to implement than on goods from Mexico and Canada, where a renegotiation of the US-Mexico-Canada Agreement (USMCA) is set to take place in 2026.
