Trump's Tariff Brinkmanship Is Going to Backfire

Yahoo

04-02-2025

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A trade war with our largest neighbors was averted at the last minute on Monday as President Donald Trump reached agreements with Mexico's President Claudia Sheinbaum and Canada's Prime Minister Justin Trudeau, moving him to postpone a 25 percent tariff that he'd said he would impose starting Tuesday on all goods imported from those countries.
Was this a case study of Trump's mastery in 'the art of the deal,' as some Republicans claim—foisting the threat of economic pain with steady determination until the objects of his wrath submit to his demands for fair trade and tighter security on the border?
Actually, no. In fact, Trump emerges from this showdown looking weaker than before.
First, he didn't squeeze much out of Canada or Mexico at all. He boasted that Mexico agreed to help stop the flow of illegal immigrants into the United States by sending 10,000 troops to the border. But Mexico sent 15,000 troops to the border in 2019 and another 10,000 in 2021 after talks with President Joe Biden. In any case, whether as a result of those troops or of Biden's own tightening measures toward the end of his term, the flow had trickled to a five-year low before Trump's inauguration last month. Even so, the U.S.–Mexico deal reached on Monday was not a one-way thing: Trump also said he would try to halt the flow of weapons from the U.S. to Mexico.
As for Canada, Trudeau told Trump, in a phone call not long after the Mexico tariffs were called off, that he would take various steps such as appointing a 'fentanyl czar' and pushing ahead with a $1 billion border-reinforcement plan—which, as the New York Times noted in its summary, 'had been announced previously.' (Italics added.)
But Trump's theatrics were not merely ineffectual. They will likely damage his credibility in making tariff threats—or threats of any sort—in the weeks and months to come.
In retrospect, because Trump got so little in exchange for suspending the tariffs, the whole Sturm und Drang looks clearly like a bluff. So the next time he goes through the same rigmarole, nobody will take it seriously.
He is still warning that tariffs on the European Union are imminent. (He has described our trade deficit with the EU nations as an 'atrocity.') He has also threatened imposing tariffs on Denmark if it doesn't sell him Greenland. The Europeans will respond in one of two ways. They will either bow courteously, call him 'sir,' and promise to do things that they're already doing, or, if some of them are in a flippant mood, they might issue counterthreats, knowing that Trump really doesn't want to impose tariffs and therefore hoping that he backs down. (The Canadians did just that, and indeed it was Trump who backed down.)
But what if Trump—frustrated by the scant winnings from the North American standoff and itching to slam somebody with serious tariffs ('the most beautiful word in the dictionary,' he cooed on the campaign trail)—doesn't take the Euros' maneuvering as an adequate answer and follows through?
Then we will be in a full-scale trade war with our leading political, economic, and military allies, some of them among the globe's few and shrinking adherents of Western democracy and the rules-based order. That would come on top of inevitable price hikes here at home, across a wide range of goods, trashing his most potent campaign issue (his casual promise to lower prices, as if the task were easy).
As Trump is threatening Europe, the tariffs against Canada and Mexico are merely postponed by 30 days, and he has gone through with a 10 percent tariff on China—sparking instant retaliation from Beijing. Whatever happens with all these tariffs, another consequence looms on the horizon: They will savage America's already tottering reputation as a reliable power, in the eyes of allies, adversaries, and the nations in between.
There's a school of thought that, in tangling with adversaries, it's sometimes wise to seem unpredictable—to tip them off balance. But zigzagging has no upside in dealing with allies, especially when it comes to the partnership's leader. Alliances depend crucially on steadiness and trust. Yet when Trump threatened to impose tariffs on two of America's closest allies for no real reason (the Wall Street Journal editorial page deemed it 'The Dumbest Trade War in History'), he stepped on the brink of violating the trilateral trade agreement that he himself had initiated and signed during his first time around in the White House.
In other words, he was telling not just Canada and Mexico but every other country in the world, 'Don't believe anything the United States says, not even in writing.'
Our NATO allies already doubt—Trump has encouraged them to doubt—whether the U.S. would abide by Article 5 of the North Atlantic Treaty and help them beat back an invasion. Japan and South Korea have expressed similar worries, prompting some of their politicians to consider building their own nuclear deterrent.
The first time around, Trump ripped up the Iran nuclear deal signed by five other countries (as a result of which Iran is now closer to building an atomic bomb than ever before). He stepped out of the Paris climate accords in his first term and has done so again now. He wants to quit the World Health Organization (which, for all its problems, at least keeps everyone notified of pandemics and other dangers). Now with the near-scuttling of the trade deals with Mexico and Canada, who would sign any accord with the United States and have much faith it would endure?
The Chinese are no doubt celebrating; Xi Jinping is using the tariff threats as an opportunity for Beijing to step in as an alternative source of supplies and trade. The EU members are making more deals among themselves that exclude the U.S., seeing that they can't engage in long-term economic planning if Washington controls the spigot at whim.
A recent 24-nation poll, commissioned by the European Council on Foreign Relations, shows that, even among our closest natural partners, America's sway and support are dwindling. As the British journalist-historian Timothy Garton Ash put it in a summary of the results:
One of the most startling findings in this year's poll is that, taking the average across nine EU member states surveyed, including Germany, France, Spain, Italy and Poland, only 22% of Europeans say they regard the US as an 'ally.' A further 51% say they see the US as a 'necessary partner,' but what kind of an alliance is it when less than a quarter of those asked say the other party is an ally?
Trump may not know about this survey. If he does, he almost certainly doesn't care. He has said many times that he doesn't much care for the very idea of alliances—multinational commitments to defend someone else at huge cost—preferring instead transactional arrangements with one state at a time.
But in a world of vanishing power blocs, where countries can go their own way and seek out other networks if they don't like their current dominating partner's demands, the United States needs allies, and those allies need a sense of reciprocating respect.
It's a dangerous world, and sometimes the United States needs to lay down a tough line, assert its interests, and not give in to those who endanger our interests. But countries like Mexico, Canada, and the members of the EU, including Denmark, don't pose such threats. They are fellow democracies, longtime allies, with many common interests and values. Shouting at them does little good—either for our own relations or for our image around the world.