Trump is promising additional tariffs of 10% on China and 25% on Canada and Mexico

BEIJING – President-elect Donald Trump plans to increase tariffs on all Chinese goods imported into the United States by another 10%, according to a post Monday on his social media platform Truth Social.

The post came hot on the heels of one in which Trump said his first of “many” executive orders on Jan. 20 would impose 25% tariffs on all products from Mexico and Canada. Such a move would end a regional free trade agreement.

Trump is scheduled to be sworn in as the next US President on January 20th. He cited illegal immigration and illegal drug trafficking as reasons for the tariffs.

“I have had many discussions with China about the massive quantities of drugs, particularly fentanyl, being sent to the United States – but to no avail,” Trump said. He claimed that Beijing had not imposed the death penalty on such drug dealers, contrary to its promises.

Fentanyl, a synthetic opioid, is an addictive drug that causes tens of thousands of overdose deaths in the United States each year

Reducing illegal supplies of the drug, whose precursors are largely made in China and Mexico, is an area where Washington and Beijing have agreed to work together.

“Drugs are flowing into our country at unprecedented levels, primarily through Mexico,” Trump said. “Until they stop, in addition to any additional tariffs, we will be charging China an additional 10% tariff on all of its many products entering the United States of America.”

Trump threatened 60% tariffs on Chinese goods during the presidential campaign.

A 10% tariff on China would be lower than the 20% to 30% expected by markets, Kinger Lau, chief China equity strategist at Goldman Sachs, said on CNBC’s “Squawk Box Asia” on Tuesday. He expects China to cut interest rates, increase fiscal stimulus and moderately devalue its currency to counteract the economic impact of increased tariffs.

According to US data from September, Mexico is the US’s largest trading partner, followed by Canada and China.

According to Chinese Customs, the United States is China’s largest trading partner on a country-by-country basis. The Asian country’s largest regional trading partners are the Association of Southeast Asian Nations and the European Union.

China and the U.S. still have a “really important trade and economic relationship,” Andy Rothman, investment strategist at Matthews Asia, told CNBC’s “Street Signs Asia” on Tuesday. He said China was currently unlikely to take countermeasures, noting that Beijing had not typically responded aggressively.

The U.S. dollar was trading about 1% stronger against the Mexican peso and 1.4% higher against the Canadian dollar on Tuesday morning. The greenback rose around 0.2% against the Chinese yuan traded in Hong Kong.

—CNBC’s Hui Jie Lim contributed to this report.