Stupid Trade War
Bad news: Over the weekend, President Donald Trump signed orders imposing tariffs on goods imported from Canada, Mexico, and China—just our top three trading partners!
Effective tomorrow at 12:01 a.m., a 25 percent import tax will apply on all goods from Canada and Mexico while a 10 percent import tax will apply on all goods from China (in addition to taxes already levied on those goods).
Some goods—such as Canadian crude oil, which will be taxed at a 10 percent rate, not 25 percent—are partially exempt. But setting a lower tariff for such energy products is Trump telling on himself, admitting that tariffs will in fact raise prices:
Canadian press is reporting the 25% tariff on Canada will be on “virtually all goods” starting on Tuesday.
Oil will be tariffs at 10%.
Reports says the tariffs will stay in place until Trump is satisfied Canada is doing enough to stop the flow of fentanyl. pic.twitter.com/0Tsg05N6ij
— Heather Long (@byHeatherLong) February 1, 2025
Team Trump’s stated justification for the tariffs? The influx of fentanyl into America:
Spare me the sob story about how Canada is our “best friend.” I love Canada and have many Canadian friends. But is the government meeting their NATO target for military spending? Are they stopping the flow of drugs into our country?
I’m sick of being taken advantage of.
— JD Vance (@JDVance) February 2, 2025
Trump says Chinese fentanyl is meandering through Canada and Mexico before entering the U.S. at our northern and southern borders. The way to get those countries to enforce their borders more strictly, Trump posits, is to hit them where it hurts. Of course, this will also mean hitting American consumers quite hard.
“We categorically reject the calumny from the White House, that the Mexican government has alliances with criminal organizations,” said Mexican President Claudia Sheinbaum in response. “If such an alliance exists anywhere, it’s with the gun manufacturers of the United States, which sell high-powered weapons to these criminal groups.”
The fentanyl justification makes little sense. Presumably, illegal drug smuggling is something border officials work to prevent; it’s not clear how Trump expects this additional pressure to alter border-enforcement protocols. Other administration officials have latched onto dissatisfaction with NATO as the reason why Canada must be punished, and onto the idea that the two countries are doing too little to work with the U.S. to control illegal immigration. Since the justifications for why the tariffs have been levied are so wide-ranging, it remains unclear what exactly officials in each country ought to do to get them rolled back.
“Drugs may be an excuse since Mr. Trump has made clear he likes tariffs for their own sake,” writes The Wall Street Journal‘s editorial board. “‘We don’t need the products that they have,’ Mr. Trump said on Thursday. ‘We have all the oil you need. We have all the trees you need, meaning the lumber.’ Mr. Trump sometimes sounds as if the U.S. shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. This is called autarky, a
Article from Reason.com
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