Trump Lost His Trade War

The Felon's efforts to start a trade war with Mexico and Canada are temporarily on hold with little actually being received from those countries while turmoil was generated among businesses and Wall Street.  With China, the increased tariffs are still in place - I am looking forward to the Felon's Walmart shopping base to be hit with higher prices - and China is retaliating.   Meanwhile, the rest of the world is getting the message loud and clear that with the Felon at the helm, America cannot be trusted and, if possible, have alternate trade relationships for self-protection. And none of this includes the Felon/Musk unilateral freeze of foreign aid which, including humanitarian aid, that not only will literally cost lives (especially in Africa), but opens the door for China and Russia to step into the gap to bolster their respective presences in the developing world. Indeed, overall, China is likely celebrating the Felon's shortsightedness. Sadly, the only things that matter to the Felon - we, the average citizens clearly do not - is stroking his ego and lashing out at perceived slights. A piece in The Atlantic by a true conservative and former Republican looks at the Felon's lost trade war. Here are excerpts:

Round one of Donald Trump’s trade war has come to an inglorious end. The United States has suspended its threats against Canada and Mexico in return for border-enforcement measures that Canada and Mexico either were doing anyway or had done before without making much difference in the flow of drugs. What can Americans and others learn from this costly episode—other than not to repeat it? The following:

American tariffs hurt Americans.

President Donald Trump has always insisted that tariffs are paid by foreigners, that they put free money into the U.S. Treasury. Trump’s week-long tariff war confirmed that nobody else in the U.S. government or in American business believes him. The National Association of Home Builders published a letter to the president predicting that his tariffs would raise the cost of housing construction. Automobile stocks slumped because investors expected Trump’s tariffs to add thousands of dollars to the cost of each new vehicle. . . . . belying Trump’s claim that the higher prices would be paid by the exporters.

Tariffs beget retaliatory tariffs.

When Trump paused tariffs on Canada and Mexico, those countries halted their retaliatory actions. But China is proceeding with a range of tariffs against U.S. exports, reserving more retaliation for later. Americans are already paying for previous rounds of Trump trade actions against China. In the first Trump presidency, China cut its purchases of U.S. soybeans by 75 percent over a single year in 2018. Brazil in 2018 overtook the United States as the world’s largest soybean producer.

There’s not much point in negotiating trade treaties with the United States.

Trump renegotiated NAFTA during his first term, replacing it with his USMCA deal. Now, in his second term, he has reneged on that. Trump’s version of NAFTA offered a range of legal ways to terminate the agreement; he did not use any of them. He did not even pretend that Canada or Mexico had somehow defaulted on their end of the bargain. He simply ignored the deal and proceeded with his tariffs under a series of contradictory excuses.

Mexico and Canada have oriented their economies to the U.S. under first NAFTA and then USMCA. That probably will not alter even after Trump’s episode of blackmail. But other countries, farther away, may wonder whether there’s any point in signing deals with such a bad-faith partner as the United States has become.

“Friend-shoring” is a fiction.

As relations have worsened between the United States and China, many in the U.S. government have looked to friend-shoring as a way to keep most of the benefits of free trade. The idea is to redirect U.S. purchasing power away from hostile China and toward more trustworthy partners. The assumption behind the term is that those partners will gladly trust the United States.

Trump, Vice President Vance, and their allies in Congress have threatened unilateral military action against Mexico; Trump himself indulges in speculation about the forced annexation of Greenland from NATO ally Denmark and about absorbing Canada as a 51st state.

Maybe that’s all just a lot of ugly talk. But the president has made clear that so-called friendship with the United States does not ensure anything for America’s partners . . . . Trump-shoring means that today’s ally can become tomorrow’s enemy, without cause or even warning.

Instability is the future.

Trump has now allowed North American trade a 30-day reprieve. His supporters want to claim that he won big concessions worth all the tumult he caused. Such claims are transparently untrue. Canada had made its big proposals for more cooperation on border issues back in December. In any case, as former Prime Minister Stephen Harper has observed, illegal drugs are much more likely to flow north into Canada than south from Canada. Mexico’s offer to (once again) shift National Guard units to the border from other duties inside the country is generally recognized as symbolic. The Wall Street Journal’s editorial page correctly identified the embarrassing truth in a headline on Monday: “Trump Blinks on North American Tariffs.”

Trump is a uniquely emotionally needy president, prone to impulsive vindictiveness. . . . . For two weeks after the election of 2020, he forbade his administration to cooperate with the transition process and denied Joe Biden’s team access to information and the funds required by law.

As Trump confronts derision about his splendid little trade war of February 2025, will he lash out again? And how is any business of any size supposed to plan for the future when the president creates economic crises to act out his ravenous ego needs?

“America First” makes it safer not to be America’s ally.

In 2024, the U.S. ran a trade deficit with Canada of about $55 billion. That same year, it ran a deficit with Vietnam of about $123 billion, more than twice as much, and with Thailand of about $46 billion, only slightly less. Yet it was Canada, not Vietnam or Thailand, that Trump threatened with tariffs.

A lesson of Trump’s trade war that all the world will hear: Countries such as Canada, Mexico, and Denmark that commit to the United States risk their security and dignity in the age of Trump. Countries such as Vietnam and Thailand that carefully navigate between the two great economic powers without making undue commitments maximize their security and their dignity.

To reward non-aligned countries and punish U.S.-aligned ones might seem a reckless, even a perverse, choice by a U.S. president. But that’s the president Americans have, and the choice he has made for them.

Expect instability and chaos to continue to the detriment of average Americans.