Trump infuriated Mexico and Canada smack in the midst of attempting to get Congressional approval for USMCA, his NAFTA replacement.

The interesting detail of Trump's latest tariff madness is that Trump went against the advice of his top trade adviser.

“Lighthizer is not happy,” an administration official, said. “This is something he’s talked about for a long time but people always talked him out of it.”

A spokesman for Mr. Lighthizer declined to comment.

Navarro Sides With Trump

President Trump’s trade adviser, Peter Navarro, told CNBC that Trump’s threat of new tariffs on Mexico came in response to that country’s “export” of “illegal aliens.”

Treasury Secretary Steve Mnuchin Also Opposed Tariffs

Administration sources say Mnuchin and Lighthizer opposed Trump tariffs on Mexico.

  • The surprise decision to announce the tariff plan came as Trump was “riled up” by conservative radio commentary about the recent surge in border crossings.
  • The opposition to the tariffs by Treasury Secretary Mnuchin and Lighthizer marked a rare moment of unity from two top administration officials with starkly different economic ideologies.
  • “Look at what we are trying to do. This is actually a brilliant move by the president to get Mexico’s attention, to get them to help us, because so far they have just been standing by,” Navarro said.
  • The tariff was pushed by adviser Stephen Miller, an immigration hawk, according to a source close to the White House.

Nearly 5 Million US Jobs Depend on Mexico

Texas and California are the top states.

Peter Schiff Chimes In


Mexican Peso Response

Manufacturing Integration

Stating the Obvious - Mexico Isn't China

Lie of the Day

What the Heck Happened?

  • Trump took advice from Peter Navarro and Stephen Miller rather than Treasury Secretary Steve Mnuchin and U.S. Trade Representative Robert Lighthizer.
  • Tariffs move USMCA, Trump's NAFTA replacement, firmly in the gutter.
  • 5 Million jobs are at risk.

Three Key Points

  1. There can no longer be any doubt that Trump reacts emotionally, not logically.
  2. Trump is not playing some amazing 3-D mind game, he is an economically illiterate trade fool.
  3. Trump just proved to the world that no deal is safe, even deals he negotiates himself.

Point three is the most crucial. No one can trust Trump.

I firmly believe a recession will do Trump in.

If I am correct, then it is in the long-term interest of countries to react in such a way that steepens any recession.

China may cooperate in that effort.

Mike "Mish" Shedlock

NAFTA is Dead: Trump Seeks Separate Agreements With Mexico and Canada

Trump proposes NAFTA by another name. But it won't look like NAFTA. He wants tailored bilateral trade agreements.

Trump Hails "Single Greatest Agreement Ever Signed"

At the last possible moment, Trump made a deal with Canada. NAFTA is gone and USMCA is in.

Expect a Deal With China, Just Don't Expect Much From It

Trump says the trade talks with China are going well. And China will purchase soybeans again. Don't expect much more.

It's the Debt Cycle (And Other Things)

The debt cycle, tariffs, and central bank hubris have created the conditions for a spectacular unwind of risk assets.

Trump Eyes Another $267 Billion in Tariffs (And He's Foolish Enough to Do It)

As Trump ponders $200 billion in tariff threats, he eyes another $267 billion on top of that.

Dear Donald Trump, Please Prove Me Wrong

Trump says he believes in free trade and the elimination of tariffs. Does he? We are about to find out.

Trade Deficit Unexpectedly Widens (And It Will Get Worse)

The trade deficit widened to $-74.4 billion from $-72.3 billion. Economists expected the deficit to shrink slightly.

No Bond Vigilantes: Just Record Short Futures Speculators

A reader asked me about "Bond Vigilantes". There aren't any, but there is a record number of speculators.

Trump Threatens to Close Border "Entirely" and Return to "Pre-NAFTA" if No Wall

Trump makes wild threats today about the wall. Apparently, he is even ready to cancel his new trade deal with Mexico.