March 6, 2025 — I didn’t think Trump would actually follow through with his threatened 25 % tariffs on imports from Canada and Mexico on March 4. I thought that even he would be forced to confront the harm that they would cause for the US economy and would have to back off. When March 4 came, it looked like I was wrong. But today’s news from the White House suggests that perhaps I wasn’t so wrong after all.
1. Staking out a negotiating position?
In trade policy, as in other areas, pundits have been hard put to distill a “method to the madness” from the torrent of moves that US President Donald Trump has announced during his first six weeks in office. Typical declarations — such as his designs on Greenland, Panama, or Canada — are so far out as to seem at first like he is joking. But he sticks with them, requiring a radical adjustment in expectations as the initial shock begins to wear off. (The “Overton window” shifts in directions that had previously been unimagined.)
Many analysts have adopted the interpretation that Trump follows a deliberate negotiating strategy. He is said to stake out an extreme position, not because he necessarily expects to get everything that he asks for, but rather as a negotiating tactic, a base from which he plans in the future to make concessions, in exchange for important concessions by others, thereby achieving a glorious bargain.
This is related to the more general characterization of Trump as “transactional” — a polite way of saying that he makes deals that have short-term benefits (possibly financial benefits to himself), while ignoring longer-term considerations of ethics, credibility, the rule of law, and the larger system. Pundits often cite the love of deal-making revealed in his ghost-written book The Art of the Deal, even though it is not certain that he ever read it, let alone wrote it.
This interpretation imputes too much strategic thinking to Trump. I am not sure that he thinks ahead at all. The pattern that generally fits better than a thought-out negotiating strategy: He likes to declare war, cheered by his supporters; and he eventually declares victory even though the US has gained little.
2. 25 % tariffs against Canada and Mexico
Trump initially announced the 25% tariffs on the neighbors soon after his inauguration, in violation of his earlier US-Mexico-Canada Agreement, not to mention the WTO. This was not a move that he had campaigned on, having emphasized rather China and other trading partners as the primary targets for tariff threats. On February 4, he suddenly postponed the tariffs for 30 days. At the same time, a further tariff of 10% against Chinese imports, an “opening salvo,” did go into effect, as did retaliation from Beijing. On March 4, the tariffs against Canada and Mexico went into effect, as well as another 10% against China. Today, as I write, the White House is once again talking about exemptions, suspensions, and postponements.
If the on-again off-again tariffs are kept on for long, they will seriously damage, not just Canada and Mexico, but the US economy as well. read more
