Trump faces a moment of account in trade after delaying tariffs

During the first week of Donald Trump’s presidency, tariffs, a favorite point of conversation during last year’s presidential campaign, were the dogs that did not threate.

Commerce seemed to stay in the background while the new administration advanced on the application of the Immigration Law, the pardons of the condemnations to the disturbances of the Capitol, an energy policy of fossil fuel and a federal workforce agitation, among a variety of others new disruptive measures.

All that changed last weekend when Trump announced 25% tariffs in the American allies of Canada and Mexico, along with 10% of tariffs on Chinese imports.

And while Since then it has been delayed to impose these rates In their residents of North America for a month after both countries agreed to new border measures, the president still faces a moment of accounts in which he will finally have to decide whether to coincide with his rhetoric with the action.

Trump often talks about commercial deficits between the United States and their two neighbors as a key source of their dissatisfaction. If that is the case, then no amount of border security or drug seizures, whatever the metric or specific demands, will make the president completely abandon his tariff threats.

Trump has also said that he sees rates not only as a tool to achieve policy objectives, but as a permanent source of American income and a means to finance government programs and reduce the budget deficit. And if that is its final objective, then tariffs on the largest commercial partners in the United States can be the only effective response.

Global financial markets recovered in this perspective on Monday, since the United States appeared on the verge of riding a multiple commercial war with some of its closest economic partners.

Then, after conversations with Mexican president Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, Trump put the tariffs in pause. While the new duties in China have entered into force – And they have caused Beijing retaliation measures – Markets have seen these US movements as less harmful and smaller reach.

On the contrary, if the US had been involved in a series of growing tariffs with Canada and Mexico, which represented more than $ 1.57TN (£ 1.24TN) in goods in 2023, the global economic effect could have been catastrophic.

This possibly serious development has been avoided, for now, with Trump and its administration declaring at least one partial victory.

However, the details of what Canada and Mexico granted paint a more complicated image.

While Canada agreed to form a joint anti-chrimes strike force with the United States and appoint a “fentanyl tsar”, the specific steps he detailed were part of a border security package that Canada had previously announced.

Mexico promised intensified the application of drugs and 10,000 troops to patrol the border between the United States and Mexico, but those numbers reflect the deployments that the nation made in 2019 and again in 2021

In a month, Trump will decide again if Canada and Mexico are doing enough to meet their demands, or if delayed tariffs will enter into force.

However, solid figures that demonstrate progress can be difficult to find.

According to administration measures themselves, American immigration officials only confiscated 43 pounds (19.5 kg) of fentanil between the United States and Mexico, but crossings without drugs, and drug addicts. Seizures are also down there.

Global financial markets have calmed down considerably since the interruption inspired by the rate of Monday morning. Investors, apparently, have concluded that in the Trump trade it is more brave than the action.

The president can extract more concessions from Canadian and Mexican leaders in a month, but they can also conclude at some time that Trump does not have the will to follow his threats.

Despite the successful statements, its Sabre noise in commerce could produce decreasing yields.

At that time, the president would have to make a decision. Is your most radical rate plans for good? Were your dreams to return the United States to the commercial policy of the late nineteenth century, which according to him was a golden age of American economic power, unrealistic?

Or continue with its vision of a new global commercial order focused on the United States despite the risk of at least economic pain in the short term?

That moment of calculation has been delayed. But it is arriving.

Follow the twists and turns of the second presidential term of Trump with the North American correspondent Anthony Zurcher Weekly American policy UNSPUN Information sheet. Readers in the United Kingdom can Register here. Those outside the United Kingdom can Register here.