President Trump’s trade dispute timeline has been temporarily suspended for 30 days, allowing Mexico and Canada to avoid a potentially devastating trade war. This reprieve is seen as a significant win for Trump’s ‘America first’ agenda, with both countries agreeing to stricter border security measures and increased cooperation on addressing fentanyl trafficking.
President Donald Trump has suspended for 30 days the hefty tariffs on Mexico and Canada that he threatened after last-minute negotiations with the two US neighbours. This temporary reprieve from a trade war that would have sent economic shockwaves through North America and beyond is a significant development.
In 2018, President Donald Trump initiated trade disputes with several countries, including China, Canada, and the European Union.
The main issue was the US trade deficit, which Trump claimed was due to unfair trade practices by these nations.
He imposed tariffs on imported goods, such as steel and aluminum from Canada and Mexico, and on Chinese products worth over $360 billion.
The disputes led to retaliatory measures from affected countries, resulting in a global trade war.
The impact of the trade disputes on the US economy was significant, with some sectors experiencing losses and others benefiting from increased exports.
Trump’s Brinkmanship Appears to Pay Off
President Trump’s high-stakes confrontation with the United States‘ closest trading partners appears to have paid off, with both Mexico and Canada agreeing to stricter border security and taking bigger steps to address fentanyl trafficking. The strategy to leverage the US economy to force concessions from other countries notches a win for Trump’s ‘America first’ agenda, allowing him to follow through on core domestic issues without American consumers feeling the sting of the economic consequences of a continental trade war.
Brinkmanship refers to a diplomatic strategy where one party deliberately takes risks to achieve its goals, pushing the other party to 'the edge of conflict.'
Donald Trump's presidency was marked by several instances of brinkmanship, including the 2017 North Korea crisis and the 2020 Iran-US standoff.
According to a study by the Council on Foreign Relations, 71% of Trump's foreign policy decisions involved some form of brinkmanship.
Concessions and Political Wins
He can point to concessions on border and crime enforcement as a victory. But Canada’s Justin Trudeau and Mexico’s Claudia Sheinbaum also can claim political wins. Trudeau can claim a temporary truce in what was shaping up to be a devastating trade war, while Sheinbaum has bought herself time to build on the points agreed in her phone call with Trump.
A New Element: Fentanyl Tsar and Intelligence Directive
The border security measures announced on Monday aren’t all new. However, a new element appears to be the appointment of a ‘fentanyl tsar’ and a C$200m intelligence directive to fight organised crime and fentanyl. This development is seen as a significant step in addressing the issue of fentanyl trafficking.
Uncertainty Remains
But it remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up. That uncertainty stirs fears that could see businesses reducing their reliance on American markets, holding off on investing in building new factories or hiring workers until the trade stand-off becomes more clear.
During his presidential campaign and tenure, Donald Trump issued numerous threats against various individuals, groups, and nations.
These threats were often made through social media, public speeches, or interviews.
According to a study by the Washington Post, Trump made over 15,000 false or misleading statements during his presidency.
In 2017, he threatened to 'destroy' North Korea if they continued their nuclear program, sparking international concern.
Additionally, Trump has also issued threats against domestic critics, including politicians and journalists.
Historically, such threats can be seen in the context of authoritarian leaders who use intimidation to maintain power.
What’s Next?
The expectation is that now Secretary of State Marco Rubio will visit Mexico soon to discuss these matters and a joint group on fentanyl will be established with Mexican and US health and security officials. If Sheinbaum does manage to prevent further trade hostilities, it will go down as the first significant victory of her new government, having only been in office since October. And it may set the tone for future interactions with President Trump and his administration.
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