Trump wastes no time in reigniting trade wars

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Subscribe to enjoy similar stories. Donald Trump has fired the first shot. Goods arriving in America from Canada and Mexico will meet tariffs of 25% as soon as he returns to the White House, the president-elect announced on November 25th.

Mr Trump also said that he would impose additional 10% tariffs on Chinese goods. With two months to go before his inauguration, the promise is rippling through financial markets. Mr Trump is not wasting any time in seeking to exert America’s influence.

Since his victory in the presidential election, some investors had speculated (and hoped) that campaign-trail tariff threats might be used merely as leverage to win concessions on other issues, without being implemented in full. Scott Bessent, a former hedge-fund manager who Mr Trump nominated to be treasury secretary on November 22nd, had suggested that Mr Trump’s tariffs could be used as an opening gambit. There is plenty of uncertainty about Mr Trump’s latest salvo, not least whether he would actually be able to implement the tariffs on his first day.

But Mr Trump’s pledge suggests that steep tariffs will be the priority, and any relief will arrive only after concessions. In posts on Truth Social, his own social-media app, Mr Trump said that tariffs would stay in place until the flow of drugs and immigrants into America had been halted. The Mexican peso dropped by 1.4% to almost 21 to the dollar after Mr Trump’s remarks; the Canadian dollar fell by 0.8%, to 1.41 per greenback, its lowest in more than four years.

A slower introduction of tariffs would have spread out the economic damage, giving businesses dependent on cross-border trade time to prepare and adjust. This approach will front-load commercial disorder. The tariffs, which Mr