Trump pledges 25% tariff on Mexico, Canada

US President-elect Donald Trump pledged a 25% tariff on all products from Mexico and Canada from his first day in office.

Trump said on social media the tariffs would remain in place until the two countries clamp down on drugs, particularly fentanyl, and migrants crossing the border illegally.

The threatened new tariff would appear to violate the terms of the US-Mexico-Canada Agreement on trade, which took effect in 2020 after Trump signed it into law.

That deal continued the largely duty-free trade between the three countries.

The president-elect also accused China of not taking strong enough action to stop the flow of illicit drugs crossing the border into the US from Mexico.

He said his government would impose an additional 10% tariff on goods from the country as a result.

Trump has previously pledged to end China's most-favored-nation trading status and slap tariffs on Chinese imports in excess of 60% - much higher than those imposed during his first term.

In response, the Chinese embassy in Washington said "no one will win a trade war or a tariff war".

Mexico described the current trade deal as a "framework of certainty" for investors, and there was no immediate comment from Canada.

Economists say that Trump's overall tariff plans would push US import duty rates back up to 1930s-era levels, stoke inflation, collapse US-China trade, draw retaliation and drastically reorder supply chains.

They say tariffs are paid by the companies that import the products subject to the duties, and they either pass on the costs to consumers or accept lower profits.

Trump frequently refers to countries paying as a consequence of his tariff plan, saying that Mexico and Canada will "pay a very big price."

In 2023, the US accounted for 75% or more of the two countries' exports.