U.S. President Donald Trump Announces Possibility of 10% Tariff on China Amid Fentanyl Concerns
President Trump announced on Tuesday that his team is discussing a 10% tariff on China, which could take effect as early as February 1. The move is reportedly in response to China’s alleged involvement in the fentanyl crisis, with Trump stating that “We’re talking about a tariff of 10% on China based on the fact that they’re sending fentanyl to Mexico and Canada.”
The proposed tariff comes as a surprise, as Trump’s team had previously threatened to impose tariffs on China as high as 60% earlier in 2024. However, the latest proposal is part of an effort to address the growing fentanyl crisis, which has led to tens of thousands of overdose deaths in the U.S. each year.
Trump also announced that his team is considering a 25% tariff on Mexico and Canada, citing concerns over the large number of people crossing the border. These tariffs would apply to both countries, with the possibility of taking effect as early as February.
Despite the potential tariffs, Chinese officials have expressed caution, with Chinese Vice Premier Ding Xuexiang calling for international efforts to support “economic globalization” and “distribute it better” at the World Economic Forum in Davos, Switzerland. The Chinese yuan initially strengthened, before weakening to trade at 7.2796 against the greenback, suggesting that investors are still wary of the potential impact on global trade.
The U.S. is China’s largest trading partner, with China’s imports from the U.S. falling 0.1% in 2024, while exports grew 4.9%. The data shows that China’s trade surplus with the U.S. in 2024 was $361 billion, higher than the $316.9 billion reported for 2020.
The Peterson Institute for International Economics has warned that imposing a 10% tariff on China, with China responding in kind, could result in a loss of $55 billion in U.S. GDP over four years and $128 billion in China.
