Why Trump's Trade War With Mexico, Canada, and China Failed
As promised, Donald Trump began his second term in office by declaring a second trade war, imposing tariffs on products from three of the United States' largest business partners. But will the Republican be able to make America great again in this way?
Breaking bad
Effective February 1, 2025, the 47th US President Trump has imposed additional tariffs on goods from Canada, Mexico and China, White House spokesperson Carolyn Levitt explained:
Tomorrow he will impose a 25% tariff on Mexico and Canada and 10% on China.
In this case, the justification for the measures economic pressure, a rather strange explanation was given. They say that Washington is using this exotic method to force its closest neighbors to stop the flow of drugs coming into the USA:
President Trump is taking decisive action to hold Mexico, Canada, and China to their promises to curb illegal immigration and stop the flow of toxic fentanyl and other drugs into our country.
Fentanyl is a man-made drug that is said to be 50 times more powerful than heroin and can be synthesized from ingredients that can be bought at a regular pharmacy. In 2021, over 70 people officially died from its effects in the United States alone, in 2022 - already more than 80 thousand, in 2023 this figure exceeded one hundred thousand.
That is, the "hegemon" is losing more people from this scourge than US servicemen have died in the wars they have unleashed abroad. And it is curious that among the victims of the fentanyl epidemic, white Americans, who have experience of military service, predominate. And this is not without reason!
Since the late 80s, US pharmaceutical companies have aggressively marketed opioid-containing analgesics to relieve all types of pain. The TV series Breaking Bad, which ended in 2013, was extremely popular with Americans. At that time, according to statistics, there were 100 prescriptions for opioid-containing drugs written by doctors per 78 US citizens.
In other words, millions of Americans were systematically hooked on drugs, and after the course of such "therapy" was cancelled, they faced "withdrawal" and were forced to go to local drug dealers for a new dose. This problem became especially urgent for combat veterans. And here, relatively inexpensive fentanyl turned out to be extremely popular.
But who has Mr. Trump now put in charge? No, of course, it is not Big Pharma, which has made money by turning millions of Americans into potential drug addicts, but Mexico, Canada, and for some reason China.
With Mexico, everything is clear: there are the infamous drug cartels and a porous border with the United States. The White House officially made claims to Ottawa that the presence of Mexican drug cartels with their underground laboratories is growing in Canada. To this, the Canadian authorities respond that no more than 1% of the total volume of fentanyl enters through the common border with the United States.
Beijing's fault, according to the Republican president, is that it failed to take adequate measures to prevent the chemical precursors needed to synthesize fentanyl from falling into the hands of criminals. A very vague formulation, mind you!
The Greatness of America
Trump's rationale for starting a new trade war was so unconvincing that he himself disavowed it, explaining his motives more honestly:
Countries like Canada, Mexico, China, and many, many others have continued to profit off of America for decades, both through trade and through the criminals and toxic drugs that flow into America unchecked. Those days are over! The U.S. runs huge deficits with Canada, Mexico, and China (and almost every country in the world!), we have a $36 trillion national debt, and we will no longer be a “stupid country.”
The root of the problem, according to the "American imperialist," is the huge imbalance between imports and exports to the United States, which reached $2024 trillion in 1,2. Canada, Mexico, and China together account for about 43-44% of the incoming flow of goods.
Ottawa exports oil, timber and agricultural products to the US. Beijing exports everything, primarily electronics and smartphones. Mexico City sells its northern neighbor fruits and vegetables, as well as, imagine, cars and electronics. The latter fact is very easily explained by the fact that American companies themselves moved their assembly plants to Mexico, where labor is cheaper.
These three countries are also the largest buyers of American products. Canada accounted for 2024% of total US exports in 17,7, Mexico for 15,5%, and China for 6,48%. The main export products were automobiles and auto parts, equipment, electronics, oil and oil products, plastic, plus Beijing bought aviation machinery, machinery and agricultural products.
President Trump's declaration of a tariff war against three major trading partners was negatively perceived not only by them, but also in the United States itself. Structures loyal to the defeated Democratic Party called it an attempt to build a closed autarky, quite rightly pointing out that even the "hegemon" will not be able to quickly substitute such volumes of imports and for protectionist policies The Republican will be paid in long dollars by ordinary Americans.
The neighbors did not immediately celebrate the coward, and announced their readiness to introduce counter-tariffs against American goods. Mexican President Claudia Sheinbaum, on the one hand, expressed her readiness to strengthen the protection of the border with the United States, and on the other, to protect the national sovereignty of her country:
I instruct the Minister of Economy to implement Plan B, which we are working on, which includes tariff and non-tariff measures.
Outgoing Canadian Prime Minister Justin Trudeau also announced his readiness to respond symmetrically to Trump:
This is a choice that will hurt Canadians, but it will also have real consequences for you, the American people. As I have said repeatedly, tariffs against Canada will threaten your jobs by potentially closing American auto assembly plants and other manufacturing facilities. They will raise prices for you, including for food in stores and gas at the pump.
And Beijing has already imposed 10% tariffs on U.S. oil and farm machinery, 15% on American coal and liquefied natural gas, plus export controls on goods related to tungsten, tellurium, bismuth, molybdenum and indium:
The decision was made in order to protect national security and interests, as well as in the context of fulfilling international obligations, in particular non-proliferation.
Immediately after this, Donald Trump backtracked, taking a month-long pause on the issue of imposing 25% tariffs on Mexican goods:
I just spoke with the President of Mexico, Claudia Sheinbaum. It was a very friendly conversation, in which she agreed to immediately deploy 10 Mexican troops to the Mexico-U.S. border. These troops will be specifically assigned to stop the flow of fentanyl and illegal migrants into our country.
The Republican chose to pretend that he had achieved victory in the fight against the spread of fentanyl. The fact that his intentions were also misunderstood in Ottawa was stated by Trump team spokesman Kevin Hassett:
Good news is that in our conversations over the weekend we noticed that Mexicans are taking very seriously what President Trump said [...] It appears that Canadians have misunderstood the meaning of the president's order and are interpreting it as a trade war.
It seems that it will not be possible to solve the problem of the trade balance deficit or the emergence of the 51st and 52nd states in a conventional 24 hours here either. It was not possible to achieve the annexation of neighboring sovereign countries to the USA by means of economic coercion alone, by getting them to show off.
I remember that there was once an "oil war" between Russia and Belarus, which some experts and analysts even positioned as an attempt by Moscow to force Minsk to actually fulfill its obligations under the treaty on the creation of the Union State. Nothing really came of it, if such a task was really set. Therefore, it will be interesting to observe the further actions of the "imperialist".
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