Trump: The Weekend Tariff Warrior

From Saturday to late Monday afternoon, America was in a trade war. Pronouncing a national emergency, the White House arrayed the heavy artillery of unilateral executive power to announce blanket 25 percent duties on products imported from Mexico and Canada and a 10 percent duty on products from China. These tariffs were employed “to hold Mexico, Canada, and China accountable” for their contributions to the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl,” the White House said. Then, with a pair of phone calls placed to his Mexican and Canadian counterparts on Monday, all was once again quiet on the North American front.

In exchange for more aggressive border policies, Trump paused the rates intended for Mexico and Canada for 30 days. On second look, however, the headline “concessions” he secured seem paltry. The Mexicans promised to deploy 10,000 troops, something Joe Biden also secured in 2021, without fanfare or protectionist posturing. The Canadians, on the other hand, touted a new $1.3-billion “border plan” — a plan which, as it became apparent to certain congressmen, had been announced in December. Sundry other minor initiatives were announced, all tiny in the shadow of Trump’s shock-and-awe diplomacy.

As the sound fades and the fury abates, the significance of the two-day skirmish remains unclear. The tale Trump told as the episode unfolded was vacillating and often internally irreconcilable. The peace terms were not quite what the President, Mexico, or Canada had an interest in portraying them to be. With a few days’ hindsight, it seems that Trump’s mercurial behavior had the greatest effect in the rage and fear it managed to stir up. Indeed, relief at securing detente in North America was so overwhelming that Asia was all but forgotten. Trump’s new 10 percent tariff on Chinese goods — still fully intact — proceeded without much notice from the commentariat.

The sheer violence of the self-contradiction of Trump’s statements deserves comment. Justified initially as a means to stanch the influx of illegal aliens and drugs, the president quickly turned to tout the new tariffs’ supposed economic benefit. “It’s not a negotiating tool,” he said. “It’s pure economic.” Trump projected that they would erase trade deficits — which he erroneously considers subsidization, and whose size he grossly overstates. He also claimed they would jolt U.S. industry towards autarky. And despite insisting repeatedly that Americans do not pay the costs of tariffs, Trump imposed only a 10 percent duty on Canadian energy products, without which his plans to lower U.S. energy prices would founder.  

Having apparently forgotten the fentanyl, Trump heralded “THE GOLDEN AGE OF AMERICA” and once again proposed the annexation of the Great White North. One wonders how things became so dire, given that the trade deal now governing North America is Trump’s own: the US-Mexico-Canada Agreement (USMCA), which he once called “the fairest, most balanced, and beneficial trade agreement we have ever signed into law” and “the best agreement we’ve ever made.”

Moreover, despite disclaiming the possibility of a negotiated resolution — “We’re not looking for a concession” — Trump halted the announced rates with a policy pittance and some shiny headlines. The concession he did identify — the balancing of America’s trade deficits with Mexico and Canada — failed to receive even a nod in the final settlement. Having failed to gain new ground on every front, Trump, the master negotiator, declared victory anyway.

Judging on the results secured — rather than the effort invested — the White House has failed on its own terms. Its Herculean efforts achieved almost nothing. They resembled deploying SEAL Team Six to deliver McDonald’s where an Uber Eats order would have sufficed.

Neither tariffs nor the threat of tariffs comes without cost. Had Trump not relented, “the tariffs on Mexico, Canada, and China…would [have shrunk] economic output by 0.4 percent and increase taxes by $1.1 trillion between 2025 and 2034 on a conventional basis,” the Tax Foundation estimates. The Peterson Institute pegged their annual cost for American households at more than $1,200 a piece, more than a third of the average annual inflation felt by a middle-income households since 2019. Americans consumers and manufacturers would suffer greatly should the prices of Mexican produce and automobiles, or Canadian crude oil and lumber, skyrocket. Trade historian Douglas Irwin received a notice of tariff-heightened energy prices within 24 hours of Saturday’s announcement.

The new duties on Chinese goods, left untouched, will still do harm. Beijing, moreover, has begun its retaliation, which will do more. The uncertainty on which Trump thrives does not similarly energize American businesses. An early estimate “finds ongoing unease could knock almost 1% off US industrial production by May 2026,” Bloomberg reports. “We have had to suspend every capex project we have for the next 24 months until we better understand the trade situation,” one manufacturing executive said.

Trump said on Monday that the future of the suspended tariffs on Canada depends not on immigration enforcement but on “whether or not a final Economic deal with Canada can be structured.” Perhaps his declaration of a border emergency served as a ploy to lay hold of Congress’s constitutionally vested tariff powers in furtherance of his economic agenda.

Trump’s bluster might signify nothing, but a usurpation of the first branch of the American government certainly does not.

David B. McGarry is the research director at the Taxpayers Protection Alliance.