Donald Trump says he will impose tariffs on China, Mexico and Canada from the first day of his presidency – sparking fears of a global trade war.

The incoming US president announced late on Monday (local time) that he would impose 25 per cent tariffs on all Canadian and Mexican imports, and add another 10 per cent to all Chinese goods.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 per cent Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he said in a series of posts on his Truth Social platform.

“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Trump said the US’s neighbours and major trading partners could “easily solve this long simmering problem”.

He also confirmed China would face higher tariffs on its goods – by 10 per cent above any existing tariffs – until it prevented the flow of illegal drugs into the US.

“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent into the United States – But to no avail,” he said in a post.

Stocks had been weak after strong gains globally in the previous session following fund manager Scott Bessent being nominated as US Treasury Secretary. He is considered by investors as a voice for Wall Street in Washington.

“It’s almost as if Trump wants to remind markets who is in control, after nominating Scott Bessent as Treasury Sec – a man markets expected to cool Trump’s potency,” City Index senior market analyst Matt Simpson said.

Bessent has said tariffs won’t add to US inflation if they are implemented correctly.

During the US election campaign, Trump promised repeatedly to implement tariffs between 10 and 20 per cent on all imported goods, and up to as much of 60 per cent on goods from China.

In September, he also threatened agricultural equipment company John Deere with a 200 per cent tariff on imports if it moved production to Mexico as planned.

During the first Trump administration, however, a tariff-inspired trade war between Washington and Beijing ended with a deal that looked very different from the White House’s initial claims.

The Chinese economy is in a much more vulnerable position than during Trump’s first time, given its prolonged property downturn, debt risks and weak domestic demand.

China responded to Trump’s announcement saying there are no winners in trade wars.

“No one will win a trade war or a tariff war. Nor will the world benefit from it,” Chinese Embassy spokesman Liu Pengyu said on social media platform X.

China-US economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a #tariff war.
The counternarcotics authorities of #China and the #US have resumed regular communication since the San Francisco Summit. The Chinese side has notified the US… https://t.co/1EPLyApiy9

— Liu Pengyu 刘鹏宇 (@SpoxCHNinUS) November 26, 2024

Liu added that China “stands ready to work with all parties to uphold true multilateralism, build an open world economy, support sustainable development, and brings countries together to address challenges, achieve common prosperity and build a community with a shared future for mankind.”

Canada stressed its importance to the US.

“Canada and the United States have one of the strongest and closest relationships-particularly when it comes to trade and border security,” Deputy Prime Minister Chrystia Freeland and Canada’s Public Safety Minister Dominic LeBlanc said in a joint statement.

“Canada places the highest priority on border security and the integrity of our shared border.”

Last month, University of Sydney United States Studies Centre research associate Georgia Edmonstone told The New Daily that Trump’s tariff policy could have many implications for Australia.

“In his previous administration, Trump also placed a small amount of tariffs on nearly all imports of steel and aluminium and on a significant number of products from China,” he said.

“What happened last time, a lot of the evidence shows, is that a lot of the increase in prices resulting from the tariffs fell on US consumers, rather than the exporters.”

During the first Trump White House, Australia was one of few countries with an exemption from Trump’s steel tariffs.

In Canberra on Tuesday, China’s ambassador to Australia Xiao Qian said after Trump’s announcement that it was important for the two countries to “promote global trade”.

He said China and Australia should “continue the globalisation process, to safeguard the integrity of the global trading system”.

“I think the first and most for us to do perhaps is to continue the good relation on momentum between our two countries and see what we can do together to promote global trade instead of compromising our respective national interest and our common interest,” Xiao said.

-with AAP