With tariffs, Trump wields leverage and sows disruption like no other US president
| Washington
In short order, President Donald Trump has proved every bit the disrupter he pledged to be in a second term.
He has launched a trade war with the United States鈥� neighbors and largest trading partners 鈥� warning Americans but if so, it鈥檚 鈥渨orth the price.鈥� He has allowed ally Elon Musk and his team access to the Treasury Department鈥檚 multi-trillion-dollar payment system. He got Venezuela to release U.S. hostages and receive deported migrants, while revoking the protected status of more than 300,000 Venezuelans in the U.S.
And that鈥檚 all since Friday. It鈥檚 a new day in Washington, as Mr. Trump aggressively pursues an 鈥淎merica First鈥� agenda and smaller government during a second term that鈥檚 barely two weeks old.
Why We Wrote This
President Donald Trump鈥檚 new tariffs against Canada, Mexico, and China are sending shock waves into global markets and dismaying allies. Economists warn they could boost U.S. inflation.
His three on imports from Mexico, Canada, and China, while long promised, shocked the world with their scope and potential economic disruption. The move shows the president embracing the role of economic risk-taker, despite the uncertainties that creates for the global economy, for U.S. leadership, and for his own popularity.聽The goal, says the White House fact sheet on the new orders, is to bring down the perennially massive U.S. trade deficit, halt illegal immigration via both the southern and northern U.S. borders, and stop fentanyl and other drugs from flowing into the country. China is a major producer and exporter of precursor chemicals used to make the deadly synthetic opioid.
But Mr. Trump鈥檚 tariffs pose dangers. Mexico鈥檚 already slowing economy could go into recession, Economic growth in Canada, too, . In the U.S., the move could boost inflation, already above the Federal Reserve鈥檚 2% target, as the cost of tariffs is often passed along to consumers. Bringing down inflation was a top Trump campaign promise.
Under the U.S.-Mexico-Canada Agreement, or USMCA 鈥� a free-trade聽deal Mr. Trump negotiated during his first term 鈥� the three countries鈥� economies are deeply intertwined, particularly in the agricultural, automotive, and energy industries. But beginning Tuesday, Mexico and Canada both face tariffs of 25% on exports to the U.S., except for a 10% tariff on Canadian energy. China, the world鈥檚 second largest economy, faces new U.S. tariffs of 10% 鈥� in addition to existing tariffs dating back to Mr. Trump鈥檚 first term that are as high as 50%, and that caused hardship for American farmers who .
Canada retaliates; Trump wields leverage
Canada, Mexico, and China are quickly retaliating or have vowed to.聽And in denouncing the U.S. move, China declared that 鈥渇entanyl is America鈥檚 problem.鈥�
Canada, in particular, has reacted with hurt and shock. Unlike the Mexico-China connection on fentanyl, a focus of genuine U.S. public concern, policymakers are hard-put to identify what Canada has done 鈥渨rong.鈥�
鈥淲e have fought and died alongside you during your darkest hours,鈥� Canadian Prime Minister Justin Trudeau said Saturday. 鈥淲e鈥檝e built the most successful economic, military, and security partnership the world has ever seen.... We鈥檙e always there, standing with you.鈥�
Mr. Trudeau announced retaliatory tariffs of 25% against the U.S. on food, clothing, and household items.
But Mr. Trump, as president of the richest and most powerful nation on earth, has the most leverage, and he knows it. And he alleges that allies including Canada have taken advantage of the U.S. with 鈥渦nfair鈥� trade deficits and by failing to spend enough on defense.
鈥淭ariffs are a powerful, proven source of leverage for protecting the national interest,鈥� the White House on the executive orders Mr. Trump signed Saturday from his Mar-a-Lago estate in Florida.
It鈥檚 not clear how far the president is willing to go. Last week, when he threatened tariffs on Colombia after it refused to accept flights of deported migrants from the U.S., the South American nation quickly backed down.
But U.S. dealings with its North American neighbors, and with China, may be another matter.
The U.S. and key trading partners could face 鈥渁n endless game of chicken鈥� for the next four years, says Raymond Robertson, an expert on international trade at Texas A&M University.
鈥淭he bet is that we鈥檙e both going to be damaged if we actually follow through,鈥� Professor Robertson says. 鈥淏ut we鈥檙e expecting their perception of the damage to be bigger, so we expect them to flinch first.鈥�
And Mr. Trump isn鈥檛 finished issuing threats. On Friday, he promised new tariffs against Europe, accusing the 27-nation European Union of treating the U.S. 鈥渟o terribly.鈥� He鈥檚 been making noise on social media about EU tariffs for months, saying that he wants Europe to buy more U.S. products, including energy, in an effort to bring down the U.S. trade deficit.
On Sunday talk shows, experts and partisans had plenty to say on Mr. Trump鈥檚 tariff threats.
鈥淚 don鈥檛 think these other countries are likely to accept meaningful changes in policy,鈥� said Larry Summers, former Treasury secretary under President Bill Clinton, on CNN. 鈥淭hink about what giving in to a bully does. It invites more bullying.鈥�
Speaking on 鈥淔ox News Sunday,鈥� Republican Sen. Lindsey Graham of South Carolina defended Mr. Trump鈥檚 tariffs. 鈥淚f you want tariffs to go away, Mexico and China, stop poisoning Americans,鈥� he said.
Later on Sunday, a reporter asked Mr. Trump how Canada and Mexico could get the tariffs lifted. 鈥漈hey have to balance out their trade, number one,鈥� he said. 鈥淭hey鈥檝e got to stop people from pouring into our country. ... And we have to stop fentanyl. And that includes China.鈥�
Musk-led disruption in U.S. agencies
The other weekend drama in Washington centered on Mr. Musk, the ultra-wealthy Trump adviser focused on downsizing government. On Friday, a longtime top civil servant in the Treasury Department, David Lebryk, was forced out after a clash over access to the department鈥檚 payment system. Mr. Musk鈥檚 team is seen as wanting such access as part of its effort to reduce government spending. At the Office of Personnel Management, where Musk aides have taken charge, career officials have been locked out of agency computer systems, spurring employee protests.
And at the U.S. Agency for International Development (USAID), the website has been offline since Saturday, a likely result of Mr. Trump鈥檚 earlier decision to suspend and review foreign aid. Such assistance 鈥� which accounts for less than 1% of the $6.8 trillion federal budget 鈥� has long been seen as a vehicle for U.S. 鈥渟oft power鈥� around the globe.
On Saturday, two of the agency鈥檚 security officials were forced out by Musk allies, after the USAID officials refused to grant them access to restricted spaces for viewing classified information, .
Mr. Musk has called USAID a 鈥渃riminal organization鈥� and made claims without evidence on his X social media site about agency activities. Supporters of USAID, the world鈥檚 largest provider of food aid, have come to the agency鈥檚 defense.
鈥淓liminating USAID 鈥� which prevents famines, counters extremism, and creates more markets for U.S. exports 鈥� would make the world a more dangerous place for Americans and be a gift to China and Russia,鈥� Sen. Amy Klobuchar, Democrat of Minnesota, .
