Donald Trump's recent threat to impose 25 percent tariffs on Canada and Mexico are a negotiating tactic, the president's long-time informal economic advisor argued Wednesday.

U.S. agricultural commodities fell back Wednesday from recent strength after President Trump announced new threats to apply tariffs on Chinese shipments to the U.S., as the ag market is expected to be one of the main industries that would be impacted by the economic fallout of new tariffs.

It follows threats by Trump to levy import taxes of 25% on Mexico and Canada, accusing them of allowing undocumented migrants and drugs into the US.

That’s because President Donald Trump said on Tuesday that a new 10% across-the-board tariff on Chinese goods could be enacted as soon as February 1. Unlike Mexico and Canada, which largely avoid tariffs on exports to the United States because of the current USMCA trade agreement which Trump signed in his first term,

Markets in China and Hong Kong fell Wednesday after U.S. President Trump reiterated a threat to impose an additional 10% tariff on Chinese goods.

Chinese stocks fell after US President Donald Trump said his threat to impose 10% tariffs on the nation’s goods was still being considered and may take place next month.