- President Donald Trump delays implementing 25% tariffs on Mexican and Canadian products for one month while negotiating with both countries. China, however, still faces a 10% tariff over fentanyl trafficking.
- China condemned the tariffs and plans to file a lawsuit with the World Trade Organization.
- Trump said tariffs may cause Americans some pain, but the price is necessary to “Make America Great Again.”
President Donald Trump is in dealmaking mode regarding his new tariffs. Hours before implementing 25% tariffs on Mexican and Canadian products, Trump pressed pause for both countries. But China, facing a 10% levy starting Tuesday, Feb. 4, appears to have been left out of the last-minute deals.
On Monday, Jan. 3, Trump announced a one-month pause on implementing tariffs on Mexico’s products after Mexican President Claudia Sheinbaum committed to sending 10,000 service members to patrol the U.S.-Mexico border.
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Canada’s concessions came after multiple calls between Prime Minister Justin Trudeau and Trump on Monday. Trump said he would pause tariffs on Canada for 30 days as Canada implements a $1.3 billion border plan and appoints a fentanyl czar.
“I don’t think we’re seeing anything like that between the U.S. president and the Chinese president,” said Mary Lovely, senior fellow at the Peterson Institute for International Economics. “And so I think the case would be made that the Chinese are simply not making the same quote-unquote deal that the Mexicans are. And that will be the distinction.”
China threatens ‘countermeasures’ and lawsuit
Trump announced Saturday, Feb. 1, that he is slapping 10% tariffs on Chinese goods over fentanyl trafficking. A spokesperson for the Chinese Foreign Ministry said the fentanyl issue is a pretext.
“China firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests,” the Chinese Foreign Ministry said.
“We’re seeing whether this type of threat actually works to get more international cooperation,” Lovely said. “Many diplomats will tell you that’s actually not the right way to get people to cooperate with you, but we’re going to see some action.”
Meanwhile, in a statement translated into English, China’s Ministry of Commerce said, “The unilateral imposition of tariffs by the United States seriously violates the rules of the World Trade Organization … China will file a lawsuit with the WTO.”
Are the China tariffs legal?
Lovely said Section 301 of the Trade Act of 1974 gives Trump a clearer path for tariffs on China, but only by U.S. standards.
“All of this is probably going to be found not consistent with WTO rules,” she said. “Even the 301 tariffs last time were found to not be consistent with WTO rules, as many people expected. China’s retaliation was also found to be inconsistent with WTO rules. So again, none of this is happening by the book, so to speak.”
Given that, though, the WTO threat lacks teeth since both countries have been in violation before.
With two countries paused, what happens now?
“President Trump has a history of having lots of reasons to like tariffs. He doesn’t necessarily stay to one,” Lovely said. “We, in some sense, are thinking about this as the first wave. There will be more, perhaps. He did, on the campaign trail, promise tariffs of up to 60% on China. So certainly, the 10% could be seen as a down payment on that.”
“On the other hand, I think his team will learn by the reaction to the tariffs and to today’s announcement to suspend the tariffs. And we may see a moderation in that love of tariffs as we move forward,” she added.
“Anybody that’s against tariffs … is controlled by China,” Trump said in a Truth Social post Sunday, Feb. 2.
In a separate post, Trump added, “WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
Also on Sunday, Trump told reporters tariffs on the European Union would “definitely happen.”
