The Trade Wars. Started They Have.

We are in the the dumbest timeline.

Let me start this post by noting that levying tariffs on China, Mexico, and Canada will not, over the long run, have any appreciable impact on immigration or illicit drug smuggling. Even if it all leads to some action on the part of the Canadian or Mexican governments that the Trump administration will claim as a victory, I am confident in saying it won’t be the victory claimed and it certainly won’t be worth the cost. Immigration is a massive, complex, and difficult problem that the US is, ultimately unwilling to really address in a mature fashion. And there is no amount of pressure that can be put on our neighbors to the north and south that will fully and completely staunch the flow of drugs into the United States.

This is just the reality of the situation.

Incantations and magic words (tariffs!) will not stop either the human will to better themselves via migration or the insatiable appetite that some have for intoxicants.

Both issues can only be managed, and only then with an acceptance of reality. Economic attacks on allies that are paid by otherwise innocent citizens of the US and our allies are not the solution.

And yet, here we are.

This is bad economics and it will create harm at home and abroad while producing no justifiable benefits.

It is a foolish self-own.

And it is interesting, to put it mildly, to watch Republicans embrace tax increases, which is what these tariffs are. Not only are they tax increases, but they are also the kind that creates immediate economic harm in exactly the opposite way that supposedly motivated GOP voters in the first place.

Instead of taxing the wealthy, these taxes directly affect the common, non-wealthy, consumer the most.

Heckuva job, GOP voters.

Just awesome.

FILED UNDER: Economics and Business, International Trade, US Politics, , , , ,
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a retired Professor of Political Science and former College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Pete S says:

    We live in a border town in Canada and came over yesterday as we did from time to time, mostly to get grocery items we can’t get at home. We noticed a huge line of cars to get gas which we guessed was due to the expected price increase coming from a tax on oil.

    We also have developed a less charitable view of our neighbours to the south. On seeing a person walking on a roadway, in snow, wearing a white camouflage jacket my wife and I turned to each other and said “Trump voter!”

    We also wondered if border guards had received the infamous buyout letters this week. It was the least intense border crossing I can remember and it is not like we ever have trouble.

    11
  2. Kathy says:

    Tariffs are sanctions a country imposes on itself.

    17
  3. drj says:

    Looking at Canadian media, what strikes me are the (completely justified) feelings of deep betrayal.

    I can’t look into the future, but I wouldn’t be surprised if the harm to US-Canada relations won’t be undone in our lifetimes.

    A second thought: across-the-board tariffs make no sense at all from a trade perspective. Putting tariffs on stuff that you don’t produce yourself cannot ever work to protect domestic industry and jobs.

    In other words, these tariffs are not meant to benefit the US, they’re meant to hurt Canada. Of course, Trump is too stupid to know the difference. But not everyone in Project 2025 is.

    I really wouldn’t be surprised if this is indeed an attempt to bring such economic hurt that Canadians opt to become the 51st state. In other words, we might not looking at trade wars, but at outright economic warfare.

    Since I don’t see Canadians being very eager to join MAGA Land, this might get a lot uglier pretty quickly.

    14
  4. Moosebreath says:

    “The Trade Wars. Started They Have.”

    “levying tariffs on China, Mexico, and Canada will not, over the long run, have any appreciable impact on immigration or illicit drug smuggling”

    It’s a trap! /Admiral Ackbar

    7
  5. Not the IT Dept. says:

    You shouldn’t assume that Trump has any real policy reason for this. He wants to show off how bigly strong and meanly tough he is, so he attacks countries that aren’t military threats to us. (Although I think he’s too dumb to realize that both Mexico and Canada can hurt Americans economically too.) And since he gets his merchandise made in China, I’m sure he’s cleared their tariff with them in advance and got their permission.

    It also explains the Greenland obsession, although the info that Greenland has great amounts of rare earth minerals needed for technology products explains a lot.

    What really should concern us and is worth a post all on its own, is the tweet Trump posted where he says that when America depended on tariffs for federal revenue the country was strong and we made a mistake when we abandoned tariffs for the income tax system.

    This reasoning is, of course, bat-sh*t insane. But since we know the billionaires regard income tax as theft, then this could be very bad for America before the end of 2025. If Trump hits other countries with tariffs, and apparently he’s tweeted about going after the EU as well, we could be well on the way to the most spectacular financial flameout in world history.

    Just so Elon Musk and the tech billionaires will be happy. And Putin will smile for the first time since he bombed a Ukrainian hospital.

    17
  6. Moosebreath says:

    “billionaires regard income tax as theft”

    If they view the taxes they pay as theft, and yet press for benefits that the government provides using their taxes, do they view themselves as receiving stolen property?

    8
  7. Scott says:

    They are getting what they voted for.

    Trump orders tariffs on Mexico and Canada — Texas’ biggest trading partners

    President Donald Trump made good on his threat to apply high taxes to imports from Mexico, Canada and China, a move that swiftly brought retaliation from Texas’ leading trading partners and set the stage for a conflict that could have major implications for the state’s economy.

    But free trade advocates worry that the tariffs, of which costs are typically passed onto the consumer, will hurt the pockets of everyday Texans. Some business leaders throughout the state, including those who support many of the president’s other domestic policies, have said that the tariffs will have an overall negative economic impact on the Texas economy.

    Trump’s tariffs have even his supporters in Texas nervous

    President Donald Trump’s vow to levy punishing taxes on the country’s top trading partners is already having the Texas business community on edge, with even Republicans who support the president acknowledging it could cause pain in the state.

    Mexico is by far Texas’ largest trading partner, followed by Canada with China coming closely behind. Free-trade advocates warn that tariffs on goods will be passed onto consumers — meaning higher prices for Texans. Any positive benefits such as bringing manufacturing back to the country may not appear for years.

    “There would undeniably, indisputably be a negative economic impact if tariffs were to be enacted,” said Glenn Hamer, president and CEO of the Texas Association of Business, a group that supports many of Trump’s other domestic policies.

    5
  8. Thomm says:

    @Scott: support of other domestic policies = allowing hate on the, “others” in society.
    At the end of the day, that is what really matters to GOP voters.

    8
  9. Not the IT Dept. says:

    @Moosebreath:

    There you go again, using your logic-fu on the real world.

    Don’t be ridiculous. Simply by agreeing to live here they’re improving America. Having to pay income tax on top of all that is just insulting, to their way of thinking.

    4
  10. Bobert says:

    Can someone explain to me why a neighbor (Canada) has an obligation to enforce another county’s (US) immigration regulations.
    Does Canada have an obligation to construct a wall?

    5
  11. Rob Robinson says:

    On 9/11, when the United States closed our airspace, Canada took our inbound flights and landed them at Gander, Newfoundland. When the United States invaded Afghanistan after 9/11, Canada sent her own troops to die alongside us. Trump now imposes devastating tariffs on Canada. This man has no honor.

    27
  12. Pete S says:

    @drj:
    I know exactly 0 Canadians who genuinely want to become the 51st state. If that is Trump’s goal this will get ugly. I never expected to see the US National Anthem get booked at a hockey game but here we are.

    6
  13. Daryl says:

    Watch the markets shit the bed on Monday.

    5
  14. drj says:

    @Pete S:

    I know exactly 0 Canadians who genuinely want to become the 51st state.

    “But how can people say no to such an honor!”

    That’s really how these assholes think.

    Anecdote time: I was at an international industry event a couple of weeks ago (full of regulators, lawyers, and other assorted bigwigs), where some obvious MAGAt was jokingly telling the locals that Trump was now looking to annex their country, too – just like Greenland – “because your women are so beautiful.”

    He sincerely thought he was making a compliment. It was painful.

    These people are in a cult where they believe that, at some level, everyone wants to be like them; women are a natural resource to be exploited; and their orange idol isn’t a rapist.

    This was not someone, by the way, you could qualify as “dumb” according to the customary criteria. Scary stuff.

    10
  15. Kingdaddy says:

    @Rob Robinson: Not to mention the Canadian troops that landed with is on the beaches of Normandy, and continued the fight until the total defeat of Germany.

    Oh, wait. We were all fighting Nazis then. To a significant number of Americans, that doesn’t count anymore. Never mind.

    13
  16. becca says:

    I think it was Eusebio that posted an interview with musk’s father here recently.
    According to the senior musk, his wife’s parents were kicked out of Canada and emigrated to South Africa because they were Nazi sympathizers and white supremacists and tried to stir up trouble.
    I’m thinking maybe junior musk is just exacting revenge on Canada because they dissed his mommy. He is definitely nuts enough to do it.
    This would also be reason #way too many that no one person should have that much power through wealth. I read over at LGM that many indigenous people would just off those that wanted more than they fair share in the community. Greed could get you killed.

    5
  17. Kathy says:

    @Pete S:

    I know exactly 0 Canadians who genuinely want to become the 51st state.

    Do they realize they’re missing out in school shootings and crippling medical debt?

    12
  18. CSK says:

    trump’s really mad at the “Globalist” Wall Street Journal:

    http://www.rawstory.com/trump-wsj-tariffs/

    3
  19. Kurtz says:

    @Kingdaddy:

    To be fair, some Americans had no problem with Germany. One of them was Allen Dulles

    Aside: If some of the stories about his actions, and those of some of the prominent families he represented, are true, they committed treason.

    3
  20. Rob1 says:

    The people forcing this crisis are either extremely stupid, or they have something else planned.

    And it’s difficult to see how “captains of industry” and the “masters of the universe” would support this kind of economic upheaval by throwing their support to Trump during this past election. Markets hate instability.

    JPMorgan’s $4bn delivery of gold bullion adds to fears Trump’s tariffs will reshape global trade

    The non-partisan congressional budget office has put the cost of extending the 2017 tax cuts at $4.6tn over 10 years, and a 25% tariff on the more than $900bn in annual imports from Canada and Mexico would raise roughly $225bn annually or $2.3tn over a decade if they had no impact on trade, according to Bloomberg. [..]

    US banking giant JPMorgan plans to deliver $4bn of gold bullion weighing more than 937 tons to New York this month, before an anticipated escalation of Donald Trump’s trade-rebalancing tariff moves planned for Saturday.

    The US bank, the world’s biggest bullion dealer, said it would deliver the hefty raw material, weighed as 30m troy ounces of gold, or 1.875m lbs, against contracts that will expire in February.

    The delivery comes as the price of gold has surged to $2,813 per ounce, and the delivery notices are the second largest ever in bourse data going back to 1994, according to Bloomberg.

    The outlet has also reported that tariff-war fears have made it profitable to fly silver into the US – a commodity that typically is transported by ship because it is considered too cheap and bulky to justify the costs.

    https://www.theguardian.com/business/2025/feb/01/jpmorgan-gold-bullion-trump-tariffs

    1
  21. Jay L Gischer says:

    Interestingly enough, I have only a small commitment to free trade. I mean, it seems like a good idea, but there are other, competing good ideas.

    For instance, a carbon duty (coupled with a carbon tax domestically). Make people pay for all the carbon they spew into the atmosphere. I’m not so much of a free trader that I would disqualify this idea on first sight.

    Of course, imposing tariffs unilaterally on Canada and Mexico – as a Republican, who have been the apostles of free trade – is pretty wild. But for once, when Trump attacks “elites” he is attacking the entrenched elite Republican opinion. It’s up to them to defend themselves. If I were a Dem, I would focus on the harm to our relationship with Canada and Mexico. (Which we are mostly doing in this thread!)

    Let the Republicans address the economic hit. They made this. Now everybody gets to see for themselves whether this brings jobs back (from Canada? Not a chance.) or makes everybody miserable. They don’t have to take my word, or anybody else’s.

    4
  22. Rob Robinson says:

    @Kingdaddy: Very true. My comments were limited to 911 simply because that took place within most of our lifetimes. But you are right. We shed blood with Canadians in both World War II and World War I, among other times.

    1
  23. Rob1 says:

    Self-interest trumps national interest. It might be revealing to see if conflicts of interests would show up in the recent financial positions among Trump’s family, friends, and associates.

    Hedge funds have bet billions of dollars against Donald Trump’s America amid fears of a market crash.

    Data from Goldman Sachs show there has been a surge in “short” bets against US stocks, meaning traders will make money when they fall in value, in a sign of growing concerns about the market.

    In January, investors have placed 10 times more bets on US stocks falling than equivalent bets that shares in leading American companies would rise, the investment bank said.

    https://finance.yahoo.com/news/hedge-funds-bet-billions-market-171219436.html

    3
  24. Kathy says:

    @Rob1:

    The outlet has also reported that tariff-war fears have made it profitable to fly silver into the US

    Guess which country is the biggest silver producer. It starts with M and ends in O

    3
  25. Scott F. says:

    Incantations and magic words (tariffs!) will not stop either the human will to better themselves via migration or the insatiable appetite that some have for intoxicants.

    Both issues can only be managed, and only then with an acceptance of reality. Economic attacks on allies that are paid by otherwise innocent citizens of the US and our allies are not the solution.

    Per The Guardian, Trump is on his fake Twitter this morning (Isn’t it dumbfounding that this is how communication from the most powerful office in the world is done now?) telling us he knows it will be bad for his voters:

    Trump warns Americans that tariffs may cause ‘pain’
    Donald Trump has said that Americans may feel economic “pain” from his tariffs on key trading partners.

    “Will there be some pain? Yes, maybe (and maybe not!)” Trump wrote on Sunday in all capital letters on his Truth social media platform, a day after signing off on tariffs on Mexico, Canada and China.

    “But we will Make America Great Again, and it will all be worth the price that must be paid,” he added.

    No benchmarks. No targets. Even immigration and drug trafficking are more specific than Trump wants to be.

    We’re going to MAGA and Trump will tell us we are Great Again when he decides he wants to. We will pay the price that must be paid (well, you people will, not Trump), and it will be worth it (at least to Trump it will).

    Incantations and magic words indeed.

    4
  26. Scott F. says:

    And it is interesting, to put it mildly, to watch Republicans embrace tax increases, which is what these tariffs are. Not only are they tax increases, but they are also the kind that creates immediate economic harm in exactly the opposite way that supposedly motivated GOP voters in the first place.

    It is insane that the Republicans are fully behind this. They should be forced to explain themselves EVERY SINGLE DAY while we point at rising prices and say “you did this!”

    4
  27. Gustopher says:

    Heckuva job, GOP voters.

    And unlike the purge of the government, or the implementation of Project 2025, no Trump voter can say they didn’t vote for this.

    Democracy in action.

    4
  28. Scott F. says:

    @Gustopher:
    Canada is targeting red state products with their retaliatory tariffs. Good for them.

    FAFO.

    4
  29. Flat Earth Luddite says:

    @Moosebreath: @Not the IT Dept.:

    Don’t be silly. All us peons owe them for the privilege of living in the universe THEY own.

    3
  30. Sleeping Dog says:

    @Rob1:

    Peter Coy had a piece in the Times last week to the effect, will the markets save us from trump. Krugman had an article earlier about the bond market and how long term bond interest rates have been rising, despite the Fed cutting short term rates in Dec. Yes the hedgies are betting against trump and if the market crashes tomorrow, prez felon will own it.

    2
  31. Flat Earth Luddite says:

    @Sleeping Dog:

    Yes the hedgies are betting against trump and if the market crashes tomorrow, prez felon will own it.

    Nah, it’ll all be the fault of those evil Dems who didn’t adequately support Fearless Leader.

    4
  32. Kurtz says:

    @Gustopher:

    And unlike the purge of the government, or the implementation of Project 2025, no Trump voter can say they didn’t vote for this.

    Why do you say that tariffs are unlike the other two in that regard?

    1
  33. Eusebio says:

    @Rob1:

    It might be revealing to see if conflicts of interests would show up in the recent financial positions among Trump’s family, friends, and associates.

    Hedge funds have bet billions of dollars against Donald Trump’s America amid fears of a market crash.
    Data from Goldman Sachs show there has been a surge in “short” bets against US stocks, meaning traders will make money when they fall in value,

    That’s a disturbing angle I hadn’t thought of. While trump loves to take credit for a rising stock market, it’s possible that he and his friends have taken short positions. I mean, who’s gonna be able to make a case for insider trading, or even be able to investigate it? If the market does drop and the short sellers cash out their positions, they can reinvest the proceeds in a market that’s rising because the idiotic tariffs were idiotic and the administration somehow claims victory over a minor concession from our neighbors.

    @becca: I didn’t post the interview with musk’s father, but interesting musk-Canada angle.

    Add: The three major stock indices did fall Friday afternoon, but only on the order of one percent, after the WH spokesperson announced that the 25 percent tariffs would be imposed on Canada and Mexico, and 10 percent on China. But I wouldn’t say the tariffs have been priced in… we’ll see if the market psychology has changed Monday morning.

    2
  34. Gustopher says:

    @Kurtz: Trump was not quiet about tariffs. He didn’t lie about tariffs*. It was all tariffs and transgender and transgender tariffs.

    He promised the stupidest economic policy possible, and he is delivering. (Turns out they should have taken him seriously and literally)

    ——
    *: other than that Americans wouldn’t be the ones paying them. But people need to look things up sometimes.

    5
  35. gVOR10 says:

    @Rob1:

    It might be revealing to see if conflicts of interests would show up in the recent financial positions among Trump’s family, friends, and associates.

    Grammar Police here. This sentence seems a little vague. Perhaps it should read:

    It might be revealing to see if the conflicts of interests would show up in the recent financial positions among Trump’s family, friends, and associates.

    1
  36. Rob1 says:

    @gVOR10:
    Or, expression of the speculative nature of my suggestion.

  37. Winecoff46 says:

    From the perspective of the common man (and woman) in a local bar, I wonder if the tariffs will raise the cost of drinking Canadian Whisky, not to mention Mexican tequila-based margaritas and similar drinks.

    1
  38. Sleeping Dog says:

    @Winecoff46:

    Yes it will! Assuming the tequila is made in Mexico and the Canadian whiskey in Canada.

    3
  39. Kurtz says:

    @Gustopher:

    He didn’t lie

    Thanks. Making sure I understood it correctly.

  40. Kathy says:

    Since Canada has responded by imposing tariffs on US goods, when can we expect the United States to begin paying them?

  41. Kathy says:

    @Sleeping Dog:

    Tequila has an origin designation. If it’s not made in Mexico -and only certain parts of Mexico at that- even if it’s made from blue agave, it’s at best mezcal.

    2
  42. Beth says:

    Does anyone know (or can reasonably speculate) as to why the tariffs aren’t supposed to go into effect until Tuesday?

    I’m assuming that Trump thought he’d announce them on Saturday so as to not spook wall st. and then on Monday the Canadians and Mexicans would come crying to him to save them. It’s stupid, and it has the benefit of being stupid.

    I can’t see either Canada or Mexico waking up tomorrow and deciding the best course of action is to start kissing ass.