Even though Donald Trump made last-minute agreements with some of the country’s closest allies that allowed him to back down from his earlier threats, the effects of his long-promised promise to use tariffs as a political tool began to become clear on Monday.
Trump declared on Sunday that he will impose 10% tariffs on China, a political adversary, and a wide 25% tariff on Canada and Mexico, two allies of the United States. Even if the action was anticipated, it nevertheless raised concerns about the growing prices of commodities throughout the American economy.
Trump ran on a platform of cutting expenses and reducing inflation, which makes that worry especially strong. According to Yale University’s Budget Lab, Trump’s tariff ideas would reduce the purchasing power of American households by $1,000 to $1,200 per year if they were completely implemented.
When Mexican President Claudia Sheinbaumann announced early Monday that an agreement had been made to postpone tariffs on her nation by one month in exchange for Mexico agreeing to increase its border security with the United States by deploying 10,000 troops of its National Guard, it was the first domino to fall.
It was an attempt to appease the Trump administration, which has stated repeatedly that reducing the flow of drug trafficking into the United States is a top priority, albeit occasionally being erratic in its messaging over the justification for tariffs.
Even though there are still a number of procedures to prevent a potentially tense trade war, Trump officials swiftly celebrated the statement.
Vice President JD Vance responded to an NBC News question at an event in Ohio by saying, “I heard the far left in this country say that these tariffs would make Americans’ lives worse for literally three days.” And in reality, the Mexican government took border enforcement and anti-cartel efforts more seriously because they were so terrified of the tariffs.
He went on to say it is not a way to worsen the situation for Americans. That is one method to improve the lot of Americans.
Trump quickly changed the tone when he tweeted on Truth Social that he had a very cordial talk with Sheinbaum. She denied what she described as Trump’s defamation over the weekend, which implied her administration had a partnership with drug dealers.
Trump’s tariff threats were not necessarily empty campaign rhetoric, as the last several days have demonstrated.
According to EJ Antoni, a research scholar at the Heritage Foundation, one difference is that leaders must acknowledge Trump’s seriousness. Nothing will actually change if they simply believe it to be empty rhetoric or campaign pledges, right? They must be aware of his seriousness.
Given the size of the U.S. economy and the disproportionate economic ties with Canada and Mexico, Antoni projected further de-escalation as Trump’s threats begin to be taken seriously.Although international trade makes up a far greater portion of other nations’ total GDP, the two allies are America’s biggest trading partners.
According to him, he has all the cards economically. He has now stated unequivocally that this is a significant issue. You have three options: get off the tracks, board the train, or get struck by a car.
The Trump administration has occasionally used erratic language when discussing the rationale behind tariffs. Peter Navarro, Trump’s economic adviser, told reporters in Washington on Monday that the conflict is “a drug war,” not a trade war, echoing remarks made by other aides.
However, Trump has stated time and time again that he fears the targets of the tariffs are bullying the United States and that the tariffs can be used as a tool to stop this alleged abuse.
For instance, Trump continued to enrage Canada just hours after the Mexico deal was revealed by asserting that the country could only avoid tariffs by becoming the 51st state, something Canada has consistently stated it would not do.
When asked what Canada could do to stop the impending trade war, Trump responded in an Oval Office meeting with reporters, “I’d like to see Canada become our 51st state.” We provide them with military protection, but we don’t need them to make our automobiles; I would much prefer have South Carolina, Detroit, or any other state do it.
Shortly before his second contact of the day with departing Canadian Prime Minister Justin Trudeau, Trump made his remarks. Not much fentanyl crosses the U.S.-Canadian border, in contrast to Mexico. On Saturday evening, Trudeau informed reporters that it represents less than 1% of the total supply in the United States.
Following that second conversation, Canada issued a 30-day tariff postponement Monday afternoon. President Trump has been using him as a political bogeyman for months, but Trudeau claimed he had a good call with him. Trudeau stated that the nation would designate a fentanyl czar and invest $1.3 million billion in a border security plan as part of the agreement.
The Canadian government originally put forth the plan’s financial component for border security in 2024.
A request for information regarding whether the previously suggested plan was employed as part of the agreement with Trump was not answered by a Canadian government spokesperson.
A request for comment was not answered by the White House.
With a few notable exceptions, the majority of congressional Republicans have not yet made public statements regarding their support for Trump’s proposal to impose tariffs on longstanding political and economic partners. Sen. Chuck Grassley, a Republican from Iowa, was the first to voice his opinion on Monday morning when he took to X to beg Trump to take into account the effects of tariffs on his state, which is heavily dependent on agriculture.
According to Grassley, Biden inflation raised farming input costs by 20%, including the astronomically high cost of fertilizer. Since family farmers import the majority of our potash from Canada, I implore President Trump to spare it from the tariff.
Additionally, Sen. Ron Johnson, R-Wis., told Newsmax that he agrees with the market’s apprehension of permanent tariffs.
According to him, it will have long-term negative effects on American consumers, American businesses, and American exporters.
Even while Trump negotiated 30-day reprieves with Canada and Mexico, the tariff dispute with both countries is still unresolved, and Monday’s threats against China—by far the largest economy of the three—remained unresolved.
China has declared that it will contest the tariffs at the World Trade Organization and take retaliatory action.
Even if there is a protracted debate on the matter, there is little sign that Republican senators will begin to voice their opposition to Trump’s warnings of trade wars in significant numbers.
According to Senate Majority Leader John Thune, R-S.D.’s political strategist, there may be a handful. However, in general, I believe there is a perception that Trump is in control of this situation. I believe that most of the anxiety regarding home state constituencies will be voiced in private and behind closed doors.
Thune is unlikely to respond in any way that is reckless or blatantly public, according to another seasoned Republican who is familiar with his thoughts.
These are senators from the US. According to the individual, they have egos just like everyone else. Sen. Thune takes a different tack. He prefers to read the room. I wouldn’t anticipate him acting rashly on this or anything else.
For the time being, the effects of possible tariffs have been avoided, but uncertainty surrounds the future, creating uncertainty in the United States and around the world. After the announcement of the one-month Mexico delay, U.S. markets immediately recovered from their early Monday decline.
Despite his campaign pledge that tariffs would benefit the country, Trump has recently started to admit that there might be some immediate suffering if they were completely enforced. However, he is now claiming that same setbacks would ultimately benefit the country.
Will there be some discomfort?Trump wrote on Truth Social, “Yes, maybe (and maybe not!).” However, we will restore America’s greatness, and the cost will be justified. Common sense is now being used to govern our nation, and the consequences will be amazing!