China’s imports will be subject to an additional 10% tariff, and Mexico and China will impose an additional 25% tariff

U.S. President-elect Donald Trump announced that he would impose an additional 10% tariff on Chinese products on top of the original tariffs, and impose a 25% tariff on all products from Mexico and Canada.

Trump pointed out through his social platform Truth Social on the 25th that he had previously negotiated with China many times on the issue of large quantities of drugs, especially Fentanyl, flowing into the United States – but with little success. Chinese representatives claimed that they would severely punish caught drug traffickers with the maximum penalty (that is, the death penalty), but unfortunately, they have not fulfilled their promise. Drugs are flowing into the United States on an unprecedented scale, mostly through Mexico. Before they stop, the United States will impose an additional 10% tariff on all Chinese imports on top of the original tariffs.

Trump also said that as we all know, tens of thousands of people are pouring into the United States through Mexico and Canada, bringing with them unprecedented crime and drug problems. A group of thousands of people from Mexico is trying to cross the “open border” of the United States, and it seems impossible to stop it.

Trump said he would sign the necessary documents on January 20, the day he takes office, to impose a 25% tariff on all Mexican and Canadian products imported into the United States and issue an executive order against the United States’ absurd open borders. Tariffs will not be lifted until drugs (especially fentanyl) and all illegal immigrants stop invading the United States.

Trump pointed out that Mexico and Canada have absolute power and can easily solve this long-standing problem. We ask them to exercise this right, and before doing so, they need to pay a very high price!

In an interview with CNBC’s “Squawk Box Asia” on the 26th, Goldman Sachs China Securities Strategy Chief Kinger Lau said that an additional 10% tariff on Chinese products would be lower than the 20% to 30% originally expected by the market. He predicted that China would offset the impact of increased tariffs on the economy by cutting interest rates, increasing fiscal stimulus packages, and mildly devaluing the renminbi.

During his campaign, Trump threatened to impose a 60% tariff on Chinese imports and a 10-20% tariff on products from other overseas regions. According to calculations, these tariff actions may increase the cost of each iPhone by US$240.

Barron’s reported on November 13 that Census Bureau data showed that the United States imported approximately $4 trillion in goods and services over the past year. Among them, US$433 billion are Chinese goods, and about one-tenth of this (US$42 billion) is smartphones. More than 80% of imported smartphones come from China, and there is not much domestic production capacity in the United States.

Analysis shows that about 45-50% of the cost of each iPhone is related to imported content. If a 60% tariff is levied on these imported contents, it would be equivalent to a tax burden of US$216~240 per iPhone 16, with an effective tax rate of 27~30%.

(Image source: shutterstock)

 

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