This is such sad news, Diana. He was a presence of calm and reason in our discussions which were sometimes…
Trump Tariffs & Trade 2024-2025
Written by Diana Thebaud Nicholson // February 4, 2025 // Economy, Trade & Tariffs, U.S. // No comments
Tariffs: Aiming at Mexico, Hitting Ourselves
Binyamin Appelbaum, NYT editorial board lead writer on economics and business
Trump has long regarded tariffs as a miracle cure, and he has not been fazed by the failure of his first-term trade policies. Unless he backs down, the damage this time could be worse.
Economic policies often fail to produce the desired results. President Trump’s new tariffs on Mexican and Canadian imports have a chance to accomplish something rarer. They are so badly misconceived that they may achieve the opposite of the president’s stated goals.
There are many reasons to regret Trump’s latest experiment with his favorite form of foreign policy bullying, but let’s focus on three.
Prices are headed up:
The United States is not imposing a tariff on Mexico and Canada; it is taxing Mexican and Canadian goods when they are brought into the United States. And retailers have made clear that consumers are likely to pay the price.
Some U.S. manufacturers will suffer:
Economic pain can spur migration:
24 November 2021
Trump Wanted to Punish China. We’re Still Paying for It.
3 – 4 February
Trump’s Tariff Brinkmanship Is Going to Backfire
By Fred Kaplan
(Slate) Trump’s theatrics were not merely ineffectual. They will likely damage his credibility in making tariff threats—or threats of any sort—in the weeks and months to come.
In retrospect, because Trump got so little in exchange for suspending the tariffs, the whole Sturm und Drang looks clearly like a bluff. So the next time he goes through the same rigmarole, nobody will take it seriously.
He is still warning that tariffs on the European Union are imminent. (He has described our trade deficit with the EU nations as an “atrocity.”) He has also threatened imposing tariffs on Denmark if it doesn’t sell him Greenland. The Europeans will respond in one of two ways. They will either bow courteously, call him “sir,” and promise to do things that they’re already doing, or, if some of them are in a flippant mood, they might issue counterthreats, knowing that Trump really doesn’t want to impose tariffs and therefore hoping that he backs down. (The Canadians did just that, and indeed it was Trump who backed down.)
Trump to pause promised tariffs for 30 days after speaking with Trudeau
PM appoints fentanyl ‘czar,’ will list Mexican cartels as terrorists
(CBC) Prime Minister Justin Trudeau said Monday U.S. President Donald Trump will hold off on levying tariffs on Canada for at least 30 days after Canada made a series of commitments to improve security along the border.
The country can let out a collective sigh of relief — at least for now.
To get Trump to shelve his punishing tariffs, Trudeau said Canada is reinforcing the border with new choppers, technology and personnel and stepping up its co-ordination with American officials to stop the flow of fentanyl.
Trudeau said Canada is launching a “Canada-U.S. Joint Strike Force,” that will be tasked with combating organized crime and money laundering.
Trump says EU tariffs will ‘definitely happen’ as Mexico, Canada and China retaliate
(The Guardian) Trump takes softer line on UK, saying ‘I think that one can be worked out’, while Mexico and Canada vow levies and to strengthen ties with each other
Donald Trump has threatened to widen the scope of his trade tariffs, repeating his warning that the European Union – and potentially the UK – will face levies, even as he conceded that Americans could bear some of the economic brunt of a nascent global trade war.
1-2 February
Trump says tariffs on allies Canada, Mexico will be ‘worth the price’
Trump’s move to impose new tariffs has bewildered the United States’ closest allies and trading partners, who have vowed to respond with levies of their own.
Trump tariffs: markets brace for falls as Mexico and Canada hit back
Fears grow for global trade, with major indices likely to plunge as US trading partners quickly retaliate, raising chance China and EU will follow suit
The Price America Will Pay for Trump’s Tariffs
Alienating allies and partners that the U.S. desperately needs means that “America First” will be “America Alone.”
By David Frum
To understand the harm Donald Trump has done with his tariffs on Canada and Mexico, here are four things you need to know:
First, every tax on imports is also a tax on exports.
The most popular beer in America is Modelo Especial, brewed in Mexico. Impose a 25 percent tariff on Modelo and sales will slide. So, too, will exports of the American barley that goes into Mexican beer. Mexico buys three-quarters of U.S. barley exports, almost all for brewing. …
31 January
U.S. tariffs on Canadian goods will come into effect Saturday, White House says
U.S. President Donald Trump says tariffs will eventually include Canadian oil
‘Nothing’ Canada can do to prevent tariffs, says Trump
30 January
This U.S. economist is pushing for tariffs on Canada
(The Current) Economist Oren Cass has been pushing for a new economic strategy in Washington, and supports the sweeping tariffs that could be imposed on Canada this weekend. He says those tariffs will hurt in the short term, but thinks they’re ultimately necessary to bring manufacturing jobs back to the U.S. — and rebuild the U.S. trade relationship with the rest of the world.
Trump repeats tariffs threat to dissuade BRICS nations from replacing US dollar
Trump warns BRICS against replacing U.S. dollar with tariffs threat
BRICS discussions on new currency gain momentum post-Russia sanctions
U.S. dollar remains primary reserve currency, study shows
(Reuters) – President Donald Trump on Thursday warned off BRICS member countries from replacing the U.S. dollar as a reserve currency by repeating a 100%-tariffs threat he had made weeks after winning the November presidential elections.
“We are going to require a commitment from these seemingly hostile Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs,” Trump said on Truth Social in a statement nearly identical to one he posted on Nov. 30.
21-22 January
Krugman Calls Trump Tariffs ‘Really, Really Destructive’
Speaking on Bloomberg The Close, Krugman says Trump’s tariffs are like “throwing sand in the gears of international commerce and manufacturing.”
Trump delivers fresh tariff threats against EU and China
Slower approach to tariffs a slight relief to markets, industry
China, Mexico, Canada in firing line for Feb 1 duties
Trade memo calls for April 1 reports on deficits, trade remedies
(Reuters) – U.S. President Donald Trump on Tuesday vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the U.S. via Mexico and Canada.
Trump voiced his latest tariff threats in remarks to reporters at the White House a day after taking office without immediately imposing tariffs as he had promised during his campaign.
Trump Says He Intends to Impose 10% Tariffs on Chinese Imports on Feb. 1
The president said the planned duties were a response to China’s failure to curb fentanyl exports.
Those tariffs would come on top of levies that Mr. Trump imposed on more than $300 billion worth of Chinese imports during his first term. Those tariffs were kept in place by former President Joseph R. Biden Jr., who imposed additional levies on Chinese electric vehicles, solar cells, semiconductors and advanced batteries.
Mr. Trump’s pledge to hit China, Canada and Mexico with tariffs is expected to result in retaliatory action against U.S. industries. Economists have warned that a global trade war could cause inflation to rebound and blunt U.S. economic growth.
Mr. Trump signed an executive order on Monday directing various agencies to study a wide variety of trade issues with an eye toward future tariffs, but he did not impose any new levies immediately, as he had previously threatened.
Trump Plans to Enact 25% Tariffs on Mexico, Canada by Feb. 1 –Trump speaks in first Oval Office comments after inauguration
… “We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people,” into the country, Trump said in response to questions from reporters, as he sat behind the Oval Office’s Resolute Desk on Monday. “I think we’ll do it February 1.”
Trump’s plans for tariffs on two neighbors vital for US energy and auto imports threaten to spark a trade war among the signatories of the US-Mexico-Canada Agreement, the successor to Nafta negotiated at Trump’s insistence during his first term. The pact governed the flow of $1.8 trillion in goods and services trade, based on 2022 data.
17 January
In Canada’s ‘Suburb of Detroit,’ Fears Over Trump’s Tariff Threat
The president-elect’s vow to impose 25 percent duties on Canadian imports could ravage Canada’s auto industry and decimate Windsor, a city deeply tied to the U.S.
(NYT) Few Canadian cities are as acutely aware as Windsor of the integration of the two countries’ economies. The city sits just across the Detroit River from Detroit, and Canada’s maple-leaf flag often flies next to the stars and stripes there. And no industry has been interwoven across the border for as long as auto making.
2024
6 December
Decoding Trump’s tariff threats
(Politico) At first blush, Trump appears to be upping the ante on tariffs during the presidential transition. In the past two weeks, he’s threatened 25 percent tariffs on Canada and Mexico, promised to add 10 percent to China tariffs already in place, and even promised whopping 100 percent duties on BRICs nations — developing countries including Brazil, South Africa, Russia, India, China — if they try to create a rival currency to the U.S. dollar.
Those could be signs of a more aggressive tariff policy, as promised on the campaign trail. But read between the lines and some trade observers think the threats show that Trump could be turning away from his most disruptive tariff plans, like the 20 percent across-the-board tariff that he pledged repeatedly in the run-up to the election.
In those Truth Social posts, Trump is using tariffs as a cudgel for some other issue — to get Canada to crack down on fentanyl, Mexico to stop the flow of migrants, or developing nations to continue using the dollar. And in each of those cases, nations quickly acquiesced to Trump’s demands, with Canadian President Justin Trudeau flying to Mar-a-Lago, Mexican President Claudia Sheinbaum holding a conciliatory call with Trump, and a South African government spokesperson decrying the “misreporting” that has led to the “incorrect narrative that BRICs is planning to create a new currency.”
Notably, using tariffs as a negotiating tool is how establishment Republicans and Wall Street types have been hoping Trump would approach the issue for months — a “sin tax,” as Sen. Kevin Cramer (R-N.D.) called them, which can be quickly threatened, applied, and then removed if the trading partner changes their behavior.
All of that has some Wall Street figures quietly optimistic that Trump’s bark will be worse than his bite on tariffs. Hedge fund billionaire Ken Griffin this week called Trump’s tariff threats “small ball” compared to other geopolitical issues, and macro researcher Marko Papic went further, saying in an email that despite the bellicose language, Trump is more likely to strike new deals than fully apply his campaign trail trade agenda.
“Trump’s brash language might have led some down the fantasy that inflated tariffs are on the way,” said Papic, who provides investment research to asset managers worldwide. “In actuality, it’s all part of his ‘America First’ approach that will see him strike a trade deal with China, and perhaps conditional on the basis that their companies relocate their production facilities to the U.S.”
That sort of negotiation is exactly what many foreign trading partners — particularly developing nations — are hoping for out of a Trump presidency.
Europe in the line of fire as Trump threatens trade war with China
Trump’s punitive tariffs would put Brussels under pressure to cut a defensive deal to fend off a glut of Chinese exports.
(Politico Eu) The U.S. president-elect campaigned on a pledge to impose tariffs of 10 to 20 percent on all imports — and singled out China for punitive rates of 60 percent. He warned of a further 10 percent last week if Beijing fails to stanch the flow of fentanyl into the United States. And days later he upped the ante against China and its BRICS allies by brandishing a 100 percent tariff if they abandon the U.S. dollar.
Although those punches have, for now, been aimed squarely at Beijing, Brussels is coming to realize that it may need to get on board with Trump’s looming trade war against China. The fear is that a flood of Chinese exports would be pushed to Europe by an insurmountable U.S. tariff wall.
As Trump Threatens Tariffs, Europe and South America Strengthen Ties
The European Union and four South American countries have reached an agreement to establish one of the largest trade zones in the world.
(NYT) The European Union reached a major trade agreement on Friday with four South American countries, concluding a long-delayed negotiation that took on new urgency as President-elect Donald J. Trump threatened to impose tariffs on some of the world’s largest economies.
The deal, between the European Union and members of Mercosur — a bloc that includes Argentina, Brazil, Paraguay and Uruguay — would establish one of the largest trade zones in the world and would be the European Union’s biggest trade agreement ever.
With European leaders preparing for the possibility that Mr. Trump’s return to office will lead to a more fragmented global economy, the deal is a significant victory for proponents of free trade, linking markets with more than 700 million people.
4 December
If Trump’s tariffs start a trade war, it would be an economic disaster
Mark Weisbrot
(The Guardian) The president-elect’s two main arguments for his tariff threat – to reduce migration and to combat drugs – are not credible
“To me, the most beautiful word in the dictionary is tariff, and it’s my favorite word,” said Donald Trump last month. Pundits, politicians and financial markets are trying to figure out why, since he announced a week ago that he would impose tariffs on the United States’s three biggest trading partners: 25% for Mexico and Canada, and 10% for China.
One theory is that tariffs can be a beautiful distraction. Trump, more than any previous US president, has fed on distractions for years, both to campaign and to govern. He can move seamlessly from one distraction to the next, like a magician preparing for the opportune moment to pull a coin from where it appears to have been hidden behind your ear.
26 November
Jeremy Kinsman: The Trumpian Tariff Trolling Has Begun
(Policy) [Donald] Trump is determined that his second term be felt by the whole world, and his attack on his neighbours is the opening salvo. The question every leader at international gatherings since Nov 5 – the Rio G20, COP 29 in Baku, and APEC in Lima – has privately asked the others is “How far will Trump try to go to “make America great again?”
Now, Trump has given his first clear indication, by vowing to impose a unilateral 25% tariff on all goods exported to the US by America’s NAFTA partners, and an extra 10% on America’s nominal economic nemesis, China, putting all three top US trading partners in the same adversarial basket.
25 November
Trump Plans Tariffs on Mexico, Canada and China That Could Cripple Trade
(NYT) The president-elect said that he would impose the across-the-board tariffs on Day 1 and that they would stay in place until Canada, Mexico and China halted the flow of drugs and migrants.
19 November
A double whammy of tariffs and strikes is coming for U.S. trade and the global supply chain in early 2025
The expectation that President-elect Donald Trump will implement new tariffs early in 2025 and a labor impasse at East and Gulf Coast ports with a new strike deadline looming has shipping companies gaming out an uncertain supply chain environment.
Logistics firm C.H. Robinson told CNBC it is fielding inquiries about front-loading of freight ahead of potential Trump tariffs.
Inventories are already increasing, according to Everstream Analytics, and the supply chain pull forward may accelerate in December, according to a forecast from Honour Lane Shipping.
(CNBC) Uncertainty among U.S. shippers is escalating into 2025 with the expectation of new Trump tariffs and the possibility of a new ports strike that could begin in mid-January.
Supply chain and logistics executives told CNBC that shippers are now trying to game out the snafus that could be coming in the global supply chain and how much inventory to order. This comes against a consumer backdrop that remains strong but is subject to macroeconomic risks, and an early start to Lunar New Year, a holiday period in Asia during which manufacturing operations halt for as long as a month.
15 October
In Trump’s Economic Plan, Tariff Is ‘the Most Beautiful Word’
(Bloomberg) Donald Trump, the self-proclaimed “Tariff Man,” made it quite clear — if it wasn’t already — that putting punishing duties on imports is the centerpiece of his economic agenda.
“To me, the most beautiful word in the dictionary is tariff, and it’s my favorite word,” the former president told Bloomberg News Editor-in-Chief John Micklethwait during an interview today.
Trump pushed back against critiques from many economists and others that imposing across-the-board tariffs would balloon the deficit and trigger trade wars.
He defended tariffs as a panacea that would force companies to produce in the US, creating American jobs and economic growth, and could be used to bolster the dollar as the world’s reserve currency. The main target would be China, but Trump also included allies like the European Union in his tough trade talk.
“You can do it as a money-making instrument, or you can do it as something to get the companies,” Trump said.