Trump vows to hit China, Mexico and Canada with new tariffs

US president-elect Donald Trump has promised to institute new tariffs on China, Mexico and Canada from the first day of his presidency as part of an effort to stop illegal immigration and drug smuggling.

Trump said he would sign an executive order that would slap all goods coming from Canada and Mexico with a 25% tariff, while China will be levied with and additional 10% tariff until Beijing cracks down on the illegal export of fentanyl to the US.

"Both Mexico and Canada have the absolute right and power to easily solve this long-simmering problem," said Trump. "It is time for them to pay a very big price!"

The tariffs will undoubtedly lead to a major escalation in tensions between the US and its top three trading partners, which account for roughly 40% of America's imports. It will also likely result in higher goods prices, given that tariffs are a form of tax on imports.

Reporting by Iain Gilbert at Sharecast.com