President Trump strikes the US economy as a weapon, threatening to put more than a trillion of trade in the line with economic wars on multiple fronts.
In a high -stage confrontation that lasted on the weekend and Monday, Mr Trump promised to set invoices to the nearest United States commercial partners, who are together for more than 40 % of US imports to force them to be looking forward of.
Mr Trump is pushing Canada, Mexico and China to stop the flows of immigrants to the border – one of the most important issues of his domestic policy – as well as to prevent lethal drug missions and to offer the United States when These are trading relationships.
Both Canada and Mexico won slight controversy on Monday, after Mr Trump agreed to delay the 25 % invoices – which had to come into force on Tuesday – for a month. The decision came after President Claudia Sheinbaum in Mexico promised to strengthen the US-Mexico border with 10,000 members of its national guard. Justin Trudeau, the Canadian prime minister, said Canada would appoint a Fentanyl Tsar, launching a common strike force to combat organized criminals and cartels on the list as terrorists, including steps.
China has not received such postponement and Mr Trump on Monday said that the 10 percent invoices that will come into force on Tuesday was just an “open saliva”.
Speaking from the Oval Office, the president also made it clear that he would use the invoices freely to get other governments to give him what he wants, essentially saying that he will exploit America’s financial power to intimidate other nations.
“I don’t want to use names, but invoices are very powerful, both financially and to get everything else you want,” Mr Trump said during observations at the Oval Office. “When you are the gold container, the invoices are very good, they are very strong and will make our country very rich again.”
The president is right that the US economy is a powerful weapon and that the invoices, if they have chosen to enter into force, would hit other countries. Canada and Mexico depend deeply on trade with the United States. They send more than 80 % of their exports to the United States and could be trapped by a prolonged race.
But many economists say the strategy will also cost the United States. They estimate that as strong as the US economy it is, trade wars would weaken it by increasing prices, guiding investment, slowing growth and reducing exports. Many farmers and businesses who see their costs rise and evaporate the markets evaporate have protested the danger.
It remains to see what the president will do as soon as the 30 -day timetable is over. But even if the president finally does not follow this time, the uncertainty created by his policies could discourage businesses from investing in new factories and hiring workers until they have a clearer picture of the way in which he will unfold trade.
Emily Blanchard, Professor of Finance at Dartmouth Business School, He argued that duties threats eat away in US financial leverage. He said Mr Trump “undermines the confidence that provides the basis of US power” by throwing the country’s burden on world markets.
If companies and investors expect the United States to develop regular invoices, they will offset future disorders, reducing their dependence on US markets, he said. “Commercial policy is an economic weapon that becomes less powerful every time it is used,” he said.
The president briefly acknowledged that trade wars could harm Americans, but argued that they would harm other countries more.
“Will there be any pain?” He wrote on social media on Sunday. “Yes, maybe (and maybe not!). But we’ll make America great again, and everything will be worth the price to be paid.”
A press release accompanying Mr Trump’s trade executive orders during the weekend said access to the US market was a “privilege” for foreign governments. The White House noted that trade represented 73 % of Mexico’s economic activity, 67 % of Canada and 37 % of China. But trade is only 24 % of the US gross domestic product, he said.
Wendy Cutler, a former US negotiator and vice president of the Asia company, said Mr Trump was right that the trade wars would be more painful for Canada and Mexico. “There is no doubt that our partners will be strictly affected by the United States, with more than three -quarters of their exports intended for our purchase,” he said.
“Still, consumers, companies and US economy will also feel pain, especially when they are subject to retalies by our partners.”
Researchers at the Peterson Institute of International Finance in Washington estimate that a 25 % invoice in Canada and Mexico and a 10 % invoice in China would hit other countries the most difficult, but will also slow down the US economy.
The Canadian and Mexican gross domestic product would be shrinking by a full rate by 2027, they estimate. GDP in the United States will only fall about one -third of this. While this may not seem too much, there are few actions that US presidents have eager to reduce economic growth by so much.
The invoices for Canada and Mexico would be particularly painful because, after 30 years under a joint trade agreement, many companies have created supply chains that cross the North America border. Companies that manufacture oil, cars, consumer care products, tequila, steel and other products have expressed their concern about invoices.
Ontario, the province that hosts Canada’s automotive industry, estimates that 450,000 jobs were in danger of invoices. Employees there announced that they would offer tax postponements and other measures to help businesses affected by invoices.
In addition to the impact on companies, commercial experts said the aggressive threats could be longer -term damage to US interests. This is because the pricing threats would eat away from international confidence that the United States will comply with the commercial rules and rules governing when governments are developing invoices and why.
Edward Alden, a trading expert on the Council on Foreign Relations, said the United States had cultivated a system of international rules and predictability for decades. With Mr Trump threatening to develop invoices in a “random, incomprehensible way, he said:” This season is over. “
“The United States now marks that invoices is a general purpose club that will be used for any political objective the president wants,” he said. “This formula will create huge, in many ways unprecedented, uncertainty not only in North America but throughout the world economy.”
Canada and Mexico were ready to oppose if the invoices came into force, despite the US threat to escalate the invoices further if they do. Canada announced on Sunday that it will target American honey, tomatoes, whiskey and refrigerators. Before postponing a month, the Mexican president also said that her country would respond.
Foreign officials have been disappointed that Mr Trump’s measurements to remove invoices were subjective and unclear. He had expanded his goals in recent days, saying that countries should also reduce their commercial surpluses with the United States, in addition to drug and immigrant action.
Asked Monday what Mr Trudeau could offer to the United States to prevent invoices, Mr Trump replied: “I don’t know. We have big deficits with Canada, as with all countries.”
Some imply that Mr Trump’s real goal is to shift responsibility for domestic problems in foreign countries.
Mrs Sheinbaum said in a social media position on Saturday that if the United States really wanted to address drug issues, they would have to look for internal measures. It could combat fentanyl sales on its streets, tackle money laundering, or launch a campaign to prevent drug consumption, he wrote.
Others have argued that Mr Trump’s motives may be more for sending political signals to his supporters, rather than really affecting drugs, immigrants or trade.
Heather Hurlburt, a former Biden administration employee, told an event at the Council on Foreign Relations in January that “signaling in politics” was the “most important purpose of invoices”.
“This is a signaling game,” he said.
Economic surveys published last year found that Mr Trump’s tariffs in his first term had not achieved his declared goals to increase production jobs in production, but that they had benefited the president politically, gaining voters for the Republican Party.
Mrs Hurlburt said that after Mr Trump’s first term, “it was duly noted in the whole political spectrum” that the invoices were incredibly effective to get people to pay attention.
“If you want to signal to the public that you are taking over the subject X, Y or Z, invoices are now an irresistible way to do it,” he said.
