President Donald Trump and his followers have praised his use of tariff threats to pressure Canada and Mexico into making concessions on border security and drug trafficking.
However, some of the agreements reached by America’s two biggest economic partners and key allies are not as significant as the hype suggests, according to experts.
Trump predicted that the 25% tariffs on the two nations would go into effect on Tuesday when he announced them on Saturday. He claimed to have achieved a deal with Mexican President Claudia Sheinbaum by Monday, agreeing to send 10,000 Mexican national guard officers to the U.S. border to stop the flow of drugs and migrants into the country. Sheinbaum stated that she and the Trump administration had reached an agreement to form a bilateral working group to address trade, migration, and security.
On the same day, Canadian Prime Minister Justin Trudeau announced that he has decided to identify cartels as terrorist groups, strengthen border and drug enforcement, and establish a new fentanyl czar.
Trump agreed to halt the tariffs on both nations for 30 days in exchange.
Ensuring the safety of ALL Americans is my duty as President, and I am doing that obligation. “I am really happy with this first result,” Trump posted on social media. The Associated Press reports that 68 Republican lawmakers praised the clash in an email issued by the White House.
Whether the 10,000 troops were a new call-up for Mexico was unclear. According to the Associated Press, it seemed like the soldiers were just being moved from other regions of the nation.
According to John Feeley, a career diplomat and former U.S. deputy head of mission in Mexico, Trump has complimented Sheinbaum on social media, but if he determines he is not seeing results from an extra army deployment, prepare for a trade war.
In the last months of the Biden administration, crossings along the southern border had already started to decline, falling below 100,000 per month for the first time since at least 2022. Fentanyl interdictions have also significantly decreased in recent months.
More than 100,000 people died from fentanyl overdoses in 2023, the most recent year for which data is available from the Centers for Disease Control and Prevention, despite the fact that these deaths decreased for the first time in five years.
However, according to Feeley, Trump is seeking publicity and is unlikely to be convinced by statistics indicating declines in drug and immigration flows, which were already on the down before to his election.
Referring to quantitative data sources, Feeley stated, “You’re mistaken if you think there’s a metric of success for Trump.” He doesn’t read DEA reports or spreadsheets. He is examining social media retweets and headlines.
According to The Wall Street Journal, the Trump administration has been inundated with requests from American companies that depend on Mexican imports, particularly automakers. During his Monday appearance on CNBC, Kevin Hassett, the director of Trump’s National Economic Council, reassured viewers that the talks with Canada and Mexico were about a drug battle rather than a trade war.
With some of the concessions made by America’s northern neighbor, a similar scenario might be unfolding. Although Canada’s parliament had previously enacted a new border security and drug interdiction bill in December, Trump claimed that Canada had decided to adopt a more assertive stance on its U.S. border in exchange for a deferral of tariffs. Trudeau also consented to declare drug cartels terrorist organizations and name a border czar.
Laurie Trautman, director of Western Washington University’s Border Policy Research Institute, described the situation as odd. According to her, fentanyl makes up a smaller portion of drug flows at the Canadian border than in Mexico, where there is drug activity, although it is still present (43 pounds were seized there last year, according to Drug Enforcement Administration data, compared with 21,100 pounds at the southern border).
One kilogram (about 2.2 pounds) of fentanyl can kill 500,000 people, according to the DEA.
Comparing the two borders is pointless, she remarked, but it’s not like we don’t have problems—illicit flows do exist.
Trump has been remarkably transparent about his justification for the tariffs, according to White House press secretary Karoline Leavitt on Monday.
the illicit increase in lethal substances and people that we have observed being smuggled across the northern and southern borders, Leavitt added. The president is making it very evident to Canada and Mexico that the United States will no longer serve as a haven for illegal people and lethal drugs.
Despite China’s numerous security dangers to the United States, Trump has also used drug flows as justification for levying an additional 10% tariff on the nation. China announced a series of retaliatory measures on U.S. goods and interests on Tuesday, including levies of up to 15% and an antitrust investigation into Google. However, analysts have pointed out that many of these measures seem to be primarily symbolic at this point, citing the small quantities of the specific U.S. goods that the Chinese levies have targeted thus far, as well as Google’s negligible presence in the country.
Trump has made it clear that he wants to keep both allies and adversaries off balance during discussions. Goldman Sachs analysts speculate that this time may be different from his previous presidency, when markets grew accustomed to ignoring his threats.
According to a note they sent to clients on Tuesday, “the outlook feels more uncertain and, even with the [tariffs] delay, we think the risks have tilted toward higher tariffs than we had previously assumed.” The problem is that President Trump’s agenda probably includes sowing doubt.
The then-candidate was asked if he would use military force if China attacked Taiwan in an October interview with the editorial board of the Wall Street Journal.
According to Trump, “[Chinese President Xi Jinping] respects me and knows I’m f—g crazy, so I wouldn’t have to.”
However, the right-leaning editorial boards of the daily claimed this week that the president blinked when he negotiated truces with Canada and Mexico that were far less than what first appeared to be.
According to the board, any compromises Trump may have achieved have probably come at the expense of increased uncertainty, which is one of the tendencies that investors and economists dislike the most.
According to the board, Mr. Trump’s tariff assault against two neighbors over the weekend has ushered in a new age of economic policy uncertainty that won’t end until the President does. This is the largest economic danger associated with Donald Trump’s second term, as we repeatedly warned prior to Election Day.