Outside the Beltway

Trade War Threats

It’s scheduled to start tomorrow.

Steven L. Taylor
18

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So reports that NYT: Trump Will Hit Mexico, Canada and China With Tariffs.

President Trump plans to move forward with imposing stiff tariffs on Mexico, Canada and China on Saturday, in an attempt to further pressure America’s largest trading partners to accept more deportees and stop the flow of migrants and drugs into the country.

In a news briefing on Friday, the White House press secretary, Karoline Leavitt, said the president would put in place a 25 percent tariff on goods from Mexico, a 25 percent tariff on goods from Canada and a 10 percent tariff on goods from China.

Ms. Leavitt said the president had chosen to impose tariffs because the countries “have allowed an unprecedented invasion of illegal fentanyl that is killing American citizens, and also illegal immigrants into our country.”

So, just to be clear, Trumps is going to increase taxes on goods coming into the US that will be paid by those in the US. While the countries in question could potentially suffer from decreased business with the US, Americans will be paying the taxes.

But hey, who needs all that foreign stuff, right?

Wait. What?

Canada, Mexico and China are America’s three largest trading partners, supplying the United States with cars, medicine, shoes, timber, electronics, steel and many other products. Together, they account for more than a third of the goods and services imported to or bought from the United States, supporting tens of millions of American jobs.

So, yeah, not great. Plus, there is the whole retaliation thing.

All three governments have promised to answer Mr. Trump’s levies with tariffs of their own on U.S. exports, including Florida orange juice, Tennessee whiskey and Kentucky peanut butter. All three of those states have Republican senators representing them in Congress and voted for Mr. Trump in 2024.

How this is supposed to have any effect on fentanyl is beyond me, save maybe some pressure on China over precursor chemicals.

And in terms of migrant flow, please note the following.

The number of unauthorized crossings at the southern border in December 2023 reached nearly 250,000, overwhelming the Border Patrol and causing the government to shut down a port of entry. At the northern border, the flow of migrants crossing illegally skyrocketed during the 2024 fiscal year. During that time, more than 23,000 arrests were made of migrants crossing illegally — two years before that figure was around 2,000.

The situation at the border has changed since then.

In December, agents made roughly 47,000 arrests at the southern border and 510 at the northern border.

All of this is absurd and disruptive for no good reason.

Gee, I wonder when the news got out?

More via Yahoo! Finance: Stock market today: Dow, S&P 500, Nasdaq stumble as Trump recommits to sweeping tariffs on Saturday.

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18 responses to “Trade War Threats”

  1. Daryl Avatar
    Daryl

    If these tariffs actually happen as reported, watch the market on Monday.

    8
  2. DK Avatar
    DK

    Republicans: crashing the economy to own the libs.

    Musk and Trump are determined to do the full Liz Truss, but unlike in the UK, American conservatives are too deep in the fascist rabbit hole to say no. Dear oh dear.

    8
  3. Neil Hudelson Avatar
    Neil Hudelson

    Thank God the stock market is tumbling because all of the elected reps rich on insider trading will actually feel this and care.

    Too bad the pain and suffering of their fellow Americans can’t move the needle the same way.

    9
  4. Kathy Avatar
    Kathy

    I still think this all makes more sense if we think of “tariffs” as a magic word the dictator uses to solve all his problems.

    4
  5. Rob1 Avatar
    Rob1

    On a related side note, it is curious that Trump decided to heap tariffs of 25% on Canada and Mexico, and went lighter on China, at 10%. China of course has long been a target of Trump’s ire.

    In light of this, our nation’s 2nd largest retailer, Amazon, owned by recent Trump convert Bezos, draws 70% of its offerings from China. Walmart, the largest US retailer, imported 60% of it’s products from China (down from 80%.). Trump had threatened China with 100% tariffs. A reduction from 100% to 10% is quite an adjustment.

    Someone talked him down off that cliff. Canada and Mexico could use some friends in high places.

    More than 70 percent of the products that wholesalers and retailers sell on Amazon are produced in China, according to a survey conducted by Jungle Scout and published by the ECDB.

    https://www.statista.com/chart/33376/share-of-items-sold-on-amazon-by-country-of-origin/#:~:text=More%20than%2070%20percent%20of,directly%20from%20sellers%20in%20China.

    The data shows that only 60% of its shipments came from China during the same period, down from 80% in 2018. To be sure, China is still Walmart’s biggest country for importing goods

    https://www.reuters.com/business/retail-consumer/walmart-shifts-india-china-cheaper-imports-2023-11-29/

    4
  6. drj Avatar
    drj

    Tariffs can potentially make sense to protect one’s domestic industry.

    But tariffs across the board, including on stuff that isn’t even produced in the US? Why burden your consumers with an additional tax if you don’t have any producers or workers that will benefit from this?

    That’s just insanity. It doesn’t even make sense on its own terms.

    5
  7. Kathy Avatar
    Kathy

    @Rob1:

    What share of US exports go to China as opposed to Canada and Mexico?

    BTW, China is one of the fastest growing aviation markets, and Boeing, for some reason, is still America’s largest single exporter.

    China’s COMAC has placed a narrowbody, the C919, into service. But 1) a lot of parts come from abroad, including the engines, and 2) production capacity is limited. So, they’ll keep buying A320 and B737 families for a while yet.

    COMAC is also developing a wide body aircraft, the C929, but it comes with the same caveats above. It was originally a joint venture with Russia, but that ended a few years ago (I wonder why).

    Assuming Xi doesn’t go crazy over Taiwan, and further developments in time, by the time COMAC makes a second generation mainline jet, they may grab a sizeable portion of the market from Airbus and Boeing. If I were them, I’d be working on a next gen replacement for the A320 family.

  8. Barry Avatar
    Barry

    @drj: “That’s just insanity. It doesn’t even make sense on its own terms.”

    It make sense in the manner of ‘I have massive discretion on this. how much are you willing to pay for an exemption?’

    7
  9. JohnSF Avatar
    JohnSF

    The big question is, if the stock markets tank, will the bond markets, as per normal, bounce?
    If they don’t, then the faeces/fan intersection is on track.
    Also, if Trump thinks the European Union is going to cower in the face of trade war threats, he’s in for a rude awakening.
    Interesting question re. UK politics: will Labour opt for UK/EU alignment?
    If so, will the Conservatives and/or Reform try to argue for Trump?
    If they do, they may be miscalculating public attitudes.

    A lot of MAGA seem to think that European nationalist conservatives are “obviously” going to favour Trumpian actions over their national interest, for some peculiar reason.

    Dear Mr Bannon: please look up “nationalism” in a handy encyclopedia.
    It may not mean what you think it means.

    5
  10. Winecoff46 Avatar
    Winecoff46

    “So, just to be clear, Trump[] is going to increase taxes on goods coming into the US that will be paid by those in the US. While the countries in question could potentially suffer from decreased business with the US, Americans will be paying the taxes.”

    I would point out that as of last year, at least, Grover Norquist, a longstanding proponent of not raising taxes, ironically had no problem with Trump using tariffs as a “negotiating tool.”

    7
  11. Scott F. Avatar
    Scott F.

    How this is supposed to have any effect on fentanyl is beyond me, save maybe some pressure on China over precursor chemicals.

    I can assure you that Trump and The Enablers have no success criteria defined for fentanyl trafficking reductions or fentanyl users’ survival rates, so there’s no target to be reached that will rescind the tariffs. Most likely, Trump will make up a win and claim maximal benevolence to our neighbors when it suits him.

    And, of course, he won’t do a damn thing about fentanyl demand within our borders because Victimhood is a key element of fascism.

    1
  12. Steven L. Taylor Avatar
    Steven L. Taylor

    @Scott F.: You are correct, of course.

    I keep falling into the mental trap that there is at least some perverse and poorly reasoned connection between action and results in the minds of those making these “policies.”

    It is all show/believing their own bullshit. Like Kathy notes, it is more incantation than it is public policy.

    1
  13. Steven L. Taylor Avatar
    Steven L. Taylor

    @Scott F.: You are correct, of course.

    I keep falling into the mental trap that there is at least some perverse and poorly reasoned connection between action and results in the minds of those making these “policies.”

    It is all show/believing their own bullshit. Like Kathy notes, it is more incantation than it is public policy.

    2
  14. Rob1 Avatar
    Rob1

    Reminds of the old National Lampoon cover —- Buy this administration policy or Trump will shoot the dog; we being the dog.

    It’s almost as if Putin’s exacting economic payback by proxy. Almost.

    The business between the North American nations now exceeds China, totaling $1.8 trillion in 2023. That is far greater than the $643 billion in commerce that the U.S. did with China in that same year.

    A ‘grenade’ lobbed into auto production

    For decades, auto companies have built supply chains that cross the borders of the United States, Mexico and Canada. More than one in five of the cars and light trucks sold in the United States were built in Canada or Mexico, according to S&P Global Mobility. In 2023, the United States imported $69 billion worth of cars and light trucks from Mexico – more than any other country — and $37 billion from Canada. Another $78 billion in auto parts came from Mexico and $20 billion from Canada. The engines in Ford F-series pickups and the iconic Mustang sports coupe, for instance, come from Canada.

    TD Economics notes that average U.S. car prices could rise by around $3,000 – this at a time when the average new car already goes for $50,000 and the average used car for $26,000, according to Kelley Blue Book.

    https://apnews.com/article/america-canada-mexico-tariffs-trump-trade-4568dababcf524945333bb518232ec4b

    1
  15. Rob1 Avatar
    Rob1

    @Rob1:

    It might be illuminating to see the current investment strategies of Trump’s family and friends. Picking winners and losers by fiat could be a profitable side gig.

    Also:

    In 2023, the U.S. imported $4.6 billion worth of tequila and $108 million worth of mezcal from Mexico, according to the Distilled Spirits Council of the United States, a trade group. The U.S. imported $537 million worth of Canadian spirits, including $202.5 million worth of whisky.

    Canada and Mexico were also the second- and third-largest importers of U.S. spirits in 2023, behind the European Union, the council said.

    The council said the U.S. is already facing a potentially devastating 50% tariff on American whiskey by the European Union, which is set to begin in March. Imposing tariffs on Mexico and Canada could pile even more retaliatory action on the industry.

    1
  16. Scott F. Avatar
    Scott F.

    @Steven L. Taylor:

    I keep falling into the mental trap that there is at least some perverse and poorly reasoned connection between action and results in the minds of those making these “policies.”

    Of course. Connection between action and results is what normal people expect.

    Sadly, the abnormals found a large enough audience for their BS Show that the performers now have power. And when success is easily made up – fentanyl statistics aren’t displayed at the grocery store or posted at major intersections like gas prices – they will propagandize the results. But, as @Rob1 notes, people are going to notice the more expensive cars and tequila. It’s normal people’s job to draw big red circles around those results and declare in a loud voice “Trump and his enablers did that!”

  17. de stijl Avatar
    de stijl

    It’s almost as if this is a bad idea and poorly thought through by a moron. And now his minions have to explain and defend this extraordinarily bad idea.

    Who could’ve predicted that?

    1
  18. pylon Avatar
    pylon

    @Rob1: It’snot really a mystery.Trump thinks he can get away with it with allies – China not so much. But he has miscalculated.

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