Just as the holiday season was beginning, the newly elected president, announced plans for his first day back in the Oval Office.
“On January 20th, as one of my many first Executive Orders,” said Donald Trump, “I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL (sic) products coming into the United States, and its ridiculous Open Borders.” Reaction to his bold and bombastic edict was mostly negative, especially from leaders of his two announced targets.
In short order, Trump’s startling pronouncement aimed directly north and south were openly challenged for not only their lack of wisdom and reason but for their potential to lead to economic chaos.
Rather than issue bold and, perhaps, even self-defeating economic pronouncements, Mexican President Claudia Sheinbaum instead suggested, why not begin first with adult-like discussions between all parties involved. “What is needed,” Sheinbaum stated firmly, “is cooperation and mutual understanding to tackle these significant challenges.” Her Canadian counterpart also reacted pragmatically.
In a hastily constructed trip to Mar a Lago for a face-to-face visit with Trump, Canadian Prime Minister Justin Trudeau diplomatically suggested that dialogue, not poorly thought out, dictums, might be better first steps in bilateral relations.
“We’re going to work together,” said Trudeau. “Ultimately it is through lots of real constructive conversations with President Trump that I am going to have, that will keep us moving forward on the right track for all Canadians.”
Over dinner at the garish Mar a Lago and in private conversations, Trudeau and Trump, along with advisors, discussed the ramifications of arbitrary add-ons that will ripple across the economies of both nations.
Scheinbaum and Trump held their own private conversations on the matter on Thanksgiving Day and also found a way to lower the temperature, at least for the present. Trump immediately declared victory. But an Associated Press story on their chat characterized things a bit differently. “Sheinbaum,” the AP story said, “suggested Mexico was already doing its part and had no interest in closing its borders.”
While Canada and Mexico were specifically named in Trump’s pre-holiday pronouncement, China, without being named, is also in the crosshairs for the same estimated 25 percent tariff hikes. Trump has long and loudly been critical of China’s trade policies and has a history of aiming his barbs at the world’s second largest economy with impunity.
If by January 20th, the day he begins his second term, Trump keeps his vow to tariff these countries’ products, Americans can expect to pay more for these Mexican imports: computers, car parts and accessories, machinery, steel and food that crosses out southern border, everything from avocados to zucchini. Canadian imports, including, cars, crude oil, gasoline, aluminum and wood will all be more costly.
While Trump was swept into office with promises of lowering inflation—an inflation that had been on a two-year downswing—experts say there would instead be a sudden negative spike. Importers, as they always have, would simply pass on their new and higher costs, directory to consumers.
Adding the threatened Trump tariffs, Trudeau pointed out, would also torch the North American trade pact that Trump’s first administration negotiated with our two neighbors.
The National Retail Federation estimated Americans would spend as much as $24 billion more on clothes; $13 billion more for furniture; $11 billion more on appliances. In all, it’s estimated American spending clout would shrink by as much as $78 billion.
Another way to see how Trump’s plan would impact came from a Center for American Progress Action Fund study. New tariffs, it said, would amount to a $1,500 tax increase and that would be based on only a 10 percent tariff.
Of course, in making his preemptory threat, Trump tied it to the flow of immigration and drugs, especially fentanyl, crossing the southern border. But in addition to the tariffs and a shutdown of the border, Trump has also named a new border czar who seems almost enthusiastic about his new job, including using the U.S. military to find, arrest and deport, presumably, millions of undocumented, including children who may be U.S. citizens.
While millions of undocumented immigrants have been in the country—many for decades—and built lives, not broken laws and worked in agriculture, construction, health care and scores of other industries, Homan said it makes no difference. But a number of U.S. mayors, including Denver Mayor Mike Johnston, say they will not roll over on Trump’s plan nor Homan’s desire to execute it even at the threat of losing federal funding, including health care funding.
“We are gonna continue to be a welcoming, open, big-hearted city that’s gonna stand by our values,” Johnson has proclaimed. “We’re not going to sell out those values to anyone. We’re not going to be bullied.”
Since Trump’s dinner with Trudeau and his conversations with Mexico’s Sheinbaum, his economic fever and desire to act out seem to have broken. But with his well-documented penchant for nocturnal policy proposals, including his 25 percent tariff on our top three trading partners, the next 47 days—days until the inauguration—hold open the possibility for anything.
