Trump’s latest speech to Congress came with a side of market panic. As stocks spiraled, he doubled down on his trade war, declaring, “Tariffs are about making America rich again.” Trump imposed a 25% tax on Canada and Mexico, plus another 10% on China.
Trump is using the fentanyl crisis to push his new tariffs. He believes that China’s export of chemicals used in fentanyl production justifies his trade war with the country. By framing the fentanyl crisis as a national security concern, Trump is using the IEEPA to impose more and more tariffs on U.S. trade partners.
China Strikes Back: Tariffs, Trade War, and Tough Talk
China is fighting back by imposing a 15% tariff on U.S. farm products, signaling the beginning of a new trade war. China’s Foreign Affairs Ministry warned Trump on X that China is ready for “any type of war”—whether it be a “tariff war, trade war, or any other type of war.”
China’s spokesperson, Lin Jian, clapped back at Trump’s fentanyl rationale calling it a “flimsy excuse,” adding that “the U.S. is the only one responsible for the fentanyl crisis in the U.S.” Despite Trump’s claim, China has actually taken strict action against money laundering and has made several arrests related to fentanyl trafficking.
Who Pays the Price? The Hidden Toll of Tariffs
Despite Trump’s bold claims, there is no clear evidence to prove China’s role in the fentanyl crisis. The Fentanyl crisis is deeply rooted in the American domestic drug market and reliance on opioid prescriptions. Tariffs won’t solve domestic issues; instead, they will hurt the average consumer.
The non-profit Tax Foundation estimates that Trump’s latest tariffs can add up to $1,200 to the average cost of living. For example, the 25% tariff on Mexico can raise grocery prices as two-thirds of US vegetables come from Mexico. A similar study also concluded that the new tariffs could reduce America’s GDP by $200 billion by 2029.
The “unjust” tariffs could also impact the U.S.’s international standing, especially with its closest allies, Canada and Mexico. The trade war could hinder the renewal of the USMCA, America’s most important alliance in the West. Experts fear that trade wars could spill over into other areas, particularly security and political alliances.
Read Next: Trump’s Presidential Address Turns Ugly: Lawmaker Al Green Expelled for Speaking Out!