What did Donald Trump do today?
For every tariff, there will be a response in kind, until we put at risk our shared enterprises. Yes, shared. For instance, among Mexico’s main exporters to the United States are General Motors, Stellantis, and Ford Motor Company, which arrived in Mexico 80 years ago. Why impose a tariff that would jeopardize them? Such a measure would be unacceptable and would lead to inflation and job losses in both the United States and Mexico.
Justin Trudeau, the prime minister of Canada, took a slightly more conciliatory tone, but ended up in the same place. He pointed out that European markets could take up the slack while noting that 60% of the United States' crude oil imports come from Canada. Ironically, it was Canada's more Trump-like politicians who pointed out that retaliation was inevitable and the resulting trade war would once again be disastrous. "It's like a family member stabbing you right in the heart," said Ontario premier Doug Ford.
According to the extremely conservative Tax Foundation, Trump's last attempt at a trade war caused an additional $80 billion in taxes to be paid by Americans, while reducing total tax revenue collected, increasing the budget deficit. The resulting economic chaos shuttered farms and businesses, putting as many as 250,000 Americans permanently out of work.
The United States does over $1.3 trillion in trade each year with Mexico and Canada.
Why does this matter?
- It's stupid to double down on a catastrophic failure.
- Other countries—even allies and trading partners—will not try to save the United States from the consequences of its own president's actions.