Trump’s Trade War: Updates And Outlook
This past weekend, Donald Trump announced import tariffs of 25% on neighboring allies, Canada and Mexico. While his motivations for doing so weren’t immediately clear, the action is a culmination of one of Trump’s long-time campaign promises to supporters.
As of Monday morning, Trump had already paused tariffs placed on Mexico after what he called a “friendly conversation” with President Claudia Sheinbaum. According to Trump, Sheinbaum agreed to supply 10,000 Mexican troops to the United States border to “stop the flow of fentanyl” and achieve other border security priorities. The tariffs are officially paused for 1 month while Trump’s cabinet members work with Mexico to hammer out a long term deal.
To the north, however, relations remain tense. Canadian Prime Minister Justin Trudeau has promised over $100 billion in retaliatory tariffs against the United States, primarily targeting products made in Republican states. Multiple provinces have also announced tariffs of their own against the US, including British Columbia and Ontario.
However, this resistance to Trump’s gamble is likely to be futile, as noted by Canada’s opposition leader, Pierre Poilievre, over the weekend. He and Canada’s conservatives blame Prime Minister Trudeau’s reluctance to support a Canadian-only energy pipeline, the Energy East pipeline, in past governments, leaving Canada entirely dependent on American processors to sell their oil and other natural resources. Consequently, this lack of independence and the simple fact that Canada exports almost 80% of its goods to the United States leave the northern neighbor in a precarious situation should they continue to refuse Trump’s demands, which are speculated to include increased border security and even, as Trump has hinted, a possible attempt to make Canada the 51st state of America, though this latter option seems unlikely.
Critics have lambasted Trump for the move, calling it inappropriate behavior among allies and a threat to the economic stability of the United States. It remains to be seen what the full effects of this move will be, but recent studies on the issue have suggested that the policy would hurt all economies involved, barring a resolution.
