Commentary
President Donald Trump faces the challenge of imposing tariffs on Mexico and Canada to prevent China from using them as a backdoor into the United States while also upholding the terms of the U.S.–Mexico–Canada Agreement (USMCA).
Initially, Trump imposed tariffs on Mexico and Canada in response to concerns that the Chinese Communist Party (CCP) was using these countries to bypass U.S. trade restrictions. On Feb. 1, he signed executive orders implementing a 25 percent tariff on all goods from Mexico and Canada, with a reduced 10 percent tariff on Canadian oil and energy exports.
These tariffs were originally set to take effect on Feb. 4 but were postponed for a month following negotiations. In retaliation, China, Canada, and Mexico announced plans to impose counter-tariffs on U.S. goods. After further discussions with Mexican and Canadian leaders, Trump announced an additional pause on some U.S. tariffs on the two countries.
However, growing differences over China policy are straining U.S. relations with its allies, placing the United States and Trump in an unenviable position of having to weaken national security against the CCP in order to maintain its alliances.
Since his first term, Trump has imposed severe tariffs on China, citing a long list of unfair actions by the regime. A major concern has been the U.S.–China trade deficit, where China exports more to the United States than it imports in return. This imbalance was partly due to China’s higher tariffs on U.S. goods, even before the trade war began. In January 2018, China’s average tariff on U.S. exports was around 8 percent, compared to the U.S. tariff of 3.1 percent on Chinese goods in 2017.
Apart from the trade deficit, Trump was also concerned about intellectual property and technology theft, with the FBI identifying China as the worst violator in the world. In the context of U.S.–China rivalry, especially in the tech sector with companies like Huawei, tariffs were seen as a way to limit China’s access to critical technologies that could enhance its military capabilities or provide an economic advantage.
Trump labeled China a “trade cheat” due to its subsidies to state-owned enterprises, which allowed China to sell products below market value and undermine U.S. competition. Additionally, the CCP’s
Military-Civil Fusion (MCF) policy blurs the line between public and private companies, both of which are leveraged by Beijing to advance its global dominance and promote a CCP-led world order. The revenue generated from U.S.–China trade is also used
to fund the modernization of the People’s Liberation Army, a prospect that, for Trump, makes little sense given the potential future conflict with the Chinese regime.
During Trump’s second term, the issues he raised with China in his first term remain unresolved. He is also frustrated by the CCP’s failure to stop the flow of precursor chemicals to Mexican drug cartels, which are flooding U.S. streets with fentanyl. In 2023 alone, fentanyl caused around
72,000 deaths. Over the past eight years, China has been establishing factories in Mexico to bypass U.S. tariffs, allowing it to access the U.S. market tariff-free under the USMCA (formerly NAFTA). For example, in 2023, Chinese companies invested $2.72 billion in Mexico’s automotive sector.
Critics of Trump’s new tariffs argue that they will increase consumer goods prices, but they mistakenly claim that tariffs cause inflation. Inflation, which reached a 40-year high under the
Biden administration, is a
monetary phenomenon driven by government money printing, credit expansion, and an increase in the money supply. While the tariffs may raise prices on some goods, they do not equate to general inflation or a devaluation of the U.S. dollar.
Moreover, with European and Asian companies still eager to access U.S. markets, there is hope they will increase investment and manufacturing within the United States. The higher prices Americans experience are the cost of increasing foreign investment in the United States, expanding U.S. manufacturing, combating fentanyl, and reducing the flow of taxpayer money to the CCP.
Canada and Mexico generally have lax policies on China and immigration, which have allowed China to gain access to the United States over the past decade. Despite U.S. pleas to tighten policies and close these backdoors, Mexico and Canada have been slow to act. However, in late February, Sheinbaum’s administration proposed that rather than the U.S. imposing tariffs on Mexico, Mexico would match U.S. tariffs on China. This move aims not only to avoid U.S. tariffs on Mexico but also to counter the influx of cheap Chinese goods, especially counterfeit products.
U.S. Treasury Secretary Scott Bessent called Mexico’s proposal “
very interesting“ and suggested that Canada should also consider implementing similar tariffs, which could create a ”fortress North America” against Chinese imports. However, Mexican tariffs on Chinese imports would not impact Chinese companies already manufacturing in Mexico, meaning this move may not fully achieve Trump’s desired outcome. Meanwhile, Canada has completely rejected the idea, refusing to impose similar tariffs on China and instead threatening retaliatory action.
In addition to raising tariffs on U.S. imports, the CCP has accused the United States of violating World Trade Organization norms while ignoring its own extensive history of trade violations—one of the key reasons behind Trump’s aggressive stance. Trump has
urged Americans to bear with him in the short term, believing that standing firm against China will yield long-term benefits.
Bessent, speaking at the Economic Club of New York on March 6, reinforced Trump’s position, stating that tariffs are intended to create a fairer global trade system—one that rewards innovation, security, legal stability, and economic resilience rather than wage suppression, currency manipulation, intellectual property theft, and excessive regulations. He argued that “access to cheap goods is not the essence of the American Dream.”
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
