I nearly used that title before the Journal. And now, Canada gets a reprieve too. 
Trump Blinks
This afternoon, the US struck a deal with Canada to pause the tariffs for 30 days. In response, the Wall Street Journal editorial board says Trump Blinks on North American Tariffs
President Trump never admits a mistake, but he often changes his mind. That’s the best way to read his decision Monday to pause his 25% tariffs against Mexico and Canada after minor concessions from each country.
Mr. Trump claimed victory, as he always does. He pointed to Mexican President Claudia Sheinbaum’s decision to deploy 10,000 National Guard troops to the U.S. border to fight drug trafficking, especially in fentanyl.
Equity markets responded with relief, recovering from steep opening losses and declines in Asia and Europe, though the Nasdaq still fell 1.2% on the day. We’re glad to see the two sides step back from an immediate and mutually harmful trade war.
But there’s much less to this tariff truce than meets the eye. Mr. Trump won an announcement of help at the border, though what the Mexican troops will actually do to fight the cartels trafficking drugs isn’t clear. Drug enforcement is a hardy perennial in U.S.-Mexican relations, and Mexico has promised help before, notably during the presidencies of Felipe Calderón and Enrique Peña Nieto.
As for immigration, Ms. Sheinbaum has already essentially agreed to cooperate on restoring the Remain in Mexico policy for migrants who reach the Mexico-U.S. border. Illegal border crossings have also been falling fast as Mr. Trump has sent a signal that illegal migrants won’t be allowed to stay in the U.S.
Later Monday, Mr. Trump paused his tariffs against Canada as well after a phone call with Prime Minister Justin Trudeau. Canada is also deploying more law enforcement to the U.S. border and will appoint a “Fentanyl Czar,” among other enforcement promises.
If the North American leaders need to cheer about a minor deal so they all claim victory, that’s better for everyone. The need is especially important for Mr. Trump given how much he has boasted that his tariffs are a fool-proof diplomatic weapon against friend or foe. Mr. Trump can’t afford to look like the guy who lost. Ms. Sheinbaum in particular seems to recognize this, and so far she’s playing her Trump cards with skill.
None of this means the tariffs are some genius power play, as the Trump media chorus is boasting. The 25% border tax could return in a month if Mr. Trump is in the wrong mood, or if he doesn’t like something the foreign leaders have said or done. It also isn’t clear what Mr. Trump really wants his tariffs to achieve. Are they about reducing the flow of fentanyl, or is his real goal to rewrite the North American trade deal he signed in his first term? If it’s the latter, there’s more political volatility ahead.
Mr. Trump’s weekend tariff broadside against a pair of neighbors has opened a new era of economic policy uncertainty that won’t calm down until the President does. As we warned many times before Election Day, this is the biggest economic risk of Donald Trump’s second term.
What Happened?
My guess is that Trump did not like the market reaction and this was really a trial balloon after all.
It is not even clear what Trump’s goals are.
Since Trump says “tariff is the most beautiful word in the world” and he wants to “use tariffs to finance the budget”, he certainly failed the mission by backing down.
Tariffs on Hold
This morning I wrote Mexico Tariffs on Hold After Border Agreement on Fentanyl and Guns
My subtitle was “Who backed down? Trump or Mexico? It’s really both. And it’s an illusion Trump gained anything.”
I originally had a title of Trump blinks, but decided what really happened is common sense prevailed.
The Journal concluded what I did. My words were “It’s an illusion Trump gained anything.” My comment:
The Tie-Tie (at Best) Deal
Mexico appeased Trump’s ego. He gets to brag.
So does Pardo. She gets to brag about halting the flow US guns (whether that happens or not, because Trump likely won’t do a damn thing).
Regardless, this is at best a tie-tie deal that could easily have been accomplished without all the tariff bravado.
Trump achieved his macho-man goal, but at a high price. The price we pay is the world now understands Trump is willing to break any deal, even those he makes.
I do not know the cost of that, and you don’t either.
Making Points
Kentucky Republican Senator Rand Paul correctly stated: “Taxing trade will mean less trade and higher prices.”
The head of the National Association of Manufacturers, Jay Timmons, said it put American jobs at risk. “The ripple effects will be severe.”
Mexican President Claudia Sheinbaum Pardo is 100 percent spot on in her assessment “We had a trade agreement and that was the best tool to continue competing against China.”
She made her point, but did so in a way that allowed Trump (and her) to save face.
Not only did Pardo make her point, so did the market.
Trump can brag all he want, but he backed down. I believe Trump was spooked by the market reaction. Would Trump have backed down if the market reaction was strongly positive?
Regardless, the bragging will continue.
Question of the Day
How is Trump supposed to raise massive amounts of money from tariffs to reduce the deficit if all he does is back down?
I will do a follow-up post on the insanity in believing tariffs can replace the income tax in raising money.
Trump’s Bravado Lasts One Day
Yesterday, Trump defended his tariffs, saying in an all-caps post: “Will there be some pain? Yes, maybe (and maybe not!)” He added that “it will all be worth the price that must be paid,” and repeated a call to turn Canada into America’s 51st state.
Well that was a fast turnaround wasn’t it?
All Trump proved is that he is willing to break any deal he makes only to back down if the market objects.
The cost is a loss of trust. No one can believe any deal he makes.
All hail the alleged victory anyway.
Related Posts
September 26, 2024: Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
October 5, 2024: Buy American Provisions Cost $125,000 Per Job Created
“Buy America” sounds great. But it’s costly and about to rise steeply.
January 31, 2025: Seven Charts Show Tariffs Would Harm the US Auto Industry
The CATO institute does a great job explaining why tariffs on Canada and Mexico would be a very bad idea.
Love this comment by Bagehot’s Ghost
The capitalist imperative is to maximize profits, not to drive down wages of your fellow humans. The more enlightened leaders, who can see nonlinear effects, grow profits by producing increases in general prosperity and goodwill, which then further enhances their businesses. The wanna-be variety, who can only see zero-sum linear outcomes, try to “drive down wages” and squeeze their own employees. We all know examples of both kinds.
Glad you understand it cause I dont.
The grand irony of most of the comments on this libertarian blog is that many of the trumpers are praising “central planning” which is a cornerstone of communism and socialism and NOT capitalism. Most won’t even be aware of their own cognitive dissonance.
I think people need to visit the link below and re-familiarize themselves with what capitalism actually is meant to be.
https://en.wikipedia.org/wiki/Capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. The defining characteristics of capitalism include private property, capital accumulation, competitive markets, price systems, recognition of property rights, self-interest, economic freedom, work ethic, consumer sovereignty, decentralized decision-making, profit motive, a financial infrastructure of money and investment that makes possible credit and debt, entrepreneurship, commodification, voluntary exchange, wage labor, production of commodities and services, and a strong emphasis on innovation and economic growth. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Exactly. If Canada produces something people in the US want to buy why shouldn’t that be allowed? If people in the US don’t like the trade deficit with Canada they should produce something Canadians want to buy. The same with Mexico.
Seemingly a very fragile system that can operate only within a narrow band in which any “interference” by capitalist monopolies, political parties, individual ultra-rich capitalists, labor unions, national governments, “speculators”, government bureaucrats, media “narratives”, etc., can throw the system into disarray and cause it to crash into depression or World War. Those waiting for the resurrection of the long-gone and mostly mythical era in which the “free” market and the “invisible hand” would straigthen things out and get things righted are going to be driven to a madness like we haven’t seen in nearly a century.
Would you give an example of central planning that is praised on this blog? I feel that if tariffs are central planning and socialistic then so are taxes, and that doesn’t sound reasonable to me.
Should we allow governments and state institutions to interfere and manipulate the market for the sake of negotiating trade agreements? For example, we agree to buy X amount of Chinese EVs in exchange for access to their rare earth mineral monopoly.
A socialist central planner would argue this is an acceptable arrangement in that it serves the “greater good.” Whereas, a capitalist may argue this serves the “common good.”
The biggest manufacturing country on the planet, China, is also the most sadistic, slave labor utilizing, child labor utilizing, environment destroying manufacturer on the planet.
And yes, I have been there and taken a very good look at what is happening in that country.
Yes, that may also be a form of “raw capitalism” but most would agree, it is not a very ‘enlightened’ way of doing business.
They were allowed entry into the WTO for purely monetary reasons.
This example that I show is probably the biggest single reason that a tariff would/should be utilized.
To ‘help’ China become more ‘enlightened’.
Wouldn’t you agree?
Mish doesn’t care about that. The capitalist imperative is to maximize profit. We should just continue to buy from China and resell here at a big markup for our wholesalers and retailers. Keep squeezing our consumers until there’s nothing left.
it’s a total fold by Trump. While his cult members are crowing about Mexico sending 10,000 troops to the border.. they forgot that Biden got Mexico to do this in 2021 and Trump also did this in 2019!
Sending 10,000 troops to the border is the bone Mexico keep throwing uot and the US keeps eating it. No one is counting how many troops are sent, or how long they stay.
Meanwhile Trump says he cares about keeping fentanyl out … but pardoned the founder of Silk Road who was literally selling fentanyl and other heavy drugs online! Can’t make this stuff up. he imposes sanctions on our neoghbors while pardoning some actual drug traficker because he had become a cause celebre for libertarians.
so the poepel he is negotiating with know Trump can’t stomach the stock market falling 1.5% and that he will take whatever is thrown at him and spin it as a giant victory and his fans will be celebrating like it’s V-Day.
Trump’s signalling, his messaging here was horrible. He looks silly, and by extension, so do we. He needs his meds adjusted. I have never seen a child behave so erratically.
Mr. Trump has decided to invoke the 11th Commandment – “Thou shalt not get away with it.”
“It is not even clear what Trump’s goals are.”
That’s the part everyone is missing.
It appears he got what he wanted. Hence the 30 day ‘wait and see’ approach to tariffs.
What I am interested in, instead of the Wall Street Journal TDS, is results.
The door has been opened in North America for US Military intervention that will destroy Drug Cartels.
Reconnaissance most likely underway in Mexican airspace and Canadian airspace by US Military spy planes. Not probable to have occurred before hand. US Military will posses greater capacity then either Mexico or Canada. Trump has opened this venue, the lifespan for drug Cartels scope of operations is counted in Days.
It took four years of Biden to understand there was even a problem at borders and that happened because Dems got wrecked in last election.
Trump has been in office two weeks, illegals crossing is down 93 percent at Southern border. Drug Houses used for smuggling have been busted in Vermont. Deportations are underway and Countries are taking back their people.
Sitting on a chair and writing Fictions is pastime for many journalists and Bloggers, but that has no bearing on what has occurred.
Whole country is not deceived nor are they amused by what comes out of mass media.
add: To those who do not understand what is occurring Trump first order of Business is to reestablish borders of the Sovereign Nation known as United States of America.
All your little petty treaties and money focus means nothing without the Country which enables that to occur. Nor does the narcissist obsession with self aggrandizement while your children and other peoples children are subject to death from drug overlords.
Let’s compare that 93% decline (I think it is even more than that) to another decline that, at least I, think is terrible – the decline of the value of the U.S. dollar since 1913 – usually given as 96-97%. I excoriate the Fed for that, (as well as politicians and economists…) yet the Fed is still around. So what do I know. All the big $$$-folks still like the Fed.
But this 93% illegal-alien drop doesn’t seem to have the same likeability. Why? I am enjoying the angst of the $$$-folks (including our own dear Mish) at Trump’s getting in front of the problem, just by signing a couple of sheets of paper to “make it so”. Is Trump suddenly Jean-Luc Trump? He’s seems to have placed the phasers on stun, just in 2 weeks! Put the butter on the popcorn, take a seat, for the greatest s… well, OK, ONE of the 10 greatest shows on earth! You can pick the other 9. And we’re enjoying it live.
As I penned, am interested in results.
We all were witness to what happened under Biden. That can not get whitewashed nor concealed.
So far Trump is moving in right direction. Dems are still out pumping fists in air and talking about things that are meaningless to bulk of Americans.
Fed depreciating USD is openly declared via 2% inflation target which has consistently been violated to upper side. Moving back to market based economy within US is goal of Trump administration. If there is another way to produce government revenues without having a viable domestic economy let’s see the program. Issuing Treasuries along with running huge deficits to fund Fiscal spending is headed to a catastrophic end. this has to be changed.
Trump signed the massive $2.2 trillion dollars of deficit spending CARES act into law, including price fixing interest rates by “buying” (with printed money) mortgage backed securities, fueling a wave of inflation and rampant speculation, notably in real estate. Trump also nominated 2%+ whatever other “transitory” inflation Jerome Powell for Fed chair. So yes, Trump and the Republicans did plenty of damage while head of the Uniparty as did Biden and the Democrats.
“All Trump proved is that he is willing to break any deal he makes only to back down if the market objects.
The cost is a loss of trust. No one can believe any deal he makes.”
America has been breaking deals, both under the radar and over the radar, since… FOREVER.
Like Kissinger said:
“It’s dangerous to be America’s enemy.
And deadly to be our friend.”
I don’t like the braggadocio of Trump. Never have. But, after watching several POTUSs in my lifetime look like spineless, bootlickers to other far-less free and accomplished countries and other low-life world ‘leaders’, I can’t say that I’m all that aggravated by Trump’s behavior.
TO THE WORLD: Deal with it..,
The same headline can and probably will be written every day for the next four years. Trump is always negotiating. WSJ and others will continue to write about what happened while Trump is focused on what he will make happen next.
Trump is uber focused on battling illegal immigration and illegal drugs. He just got Canada and Mexico to do his bidding without any economic consequences.
The MSM is once again grasping for straws because they cannot keep up.
Fentanyl traffic in the USA was already down 50% YOY when election day arrived, and OD deaths down double digit % in 2024. Trump knows this, will make no change, then thump his chest about how he cut Fentanyl in half. People are such suckers they’ll just take his word for it rather than search for the actual facts themselves. What a sad state of affairs when the internet has empowered everyone with access to facts, yet here we sit gouging out each others’ eyes or collecting digital candy and watching cat reels videos.
It’s a ceasefire. When the Mexican Hezbollah launch their attack the tariffs will dbl
Apparently, Mexico already has 10K troops at the border, but was able to get the US to agree to help stop the flow of arms to Mexico which the US had ignored in the past. Canada already had a $1.3 billion boarder plan, and the only addition is creating a new position called “Fentanyl Czar”.
If this is winning to MAGA, I’d hate to see what losing looks like.
No. She is sending in National Guard troops. It’s different from the Mexican military. As for Canada a “plan” is not action so having a plan means nothing. After a month we will see if the plan has become reality.
Right. Biden got that many troops there twice, both times without a stock market pants-soiling. Trump needs the drama to feed his insatiable ego.
Now Trump will use tariffs on the EU and we will see what will happen. If you do a breakdown of the trade deficit you find which sectors and products will be at the center of discussions. The number one sector is pharmaceuticals and the second is car parts mainly from Germany. The spat with Canada and Mexico was over border arrangements so it was easy to get action. The tariffs with the EU is another matter because it involves actual horse-trading. The EU just did a free trade deal with the Mercosur countries where the EU will be importing basically agricultural goods from those countries. The rub is that many of these products contain GMO’s and the GMO’s until now has been the reasonings behind why the EU refuses to import American agricultural products so the EU has a conundrum here. That is probably the weak link for the EU in the coming negotiations. Should be interesting.
The Trump show continues. Look at this hand and don’t look behind the curtain. I give it a few months before people realize what is going on. And some ONE is not going to be happy.
35% of the suckers will never even try to open their eyes to the Trump charade, you and I both know that.
Perhaps Europe will be next. One can only pine for a global show. Hopefully Trump won’t back down again.
It’s in the vassals’ own interest to realize that their American “ally” doesn’t care about them. You’d think destroying Nordstream so they’ll need American LNG would have made that clear, but most of their leaders are fools.
Tariffs are either a tax on American buyers OR a tax on foreign sellers, it just depends who wants the sale more.
So if foreign producers really want to sell into America, they’ll eat the tariff in their price change.
If the foreign companies need the sales and MUST lower their prices, then American consumers won’t see any price increases while the foreign sellers just lose a part of their revenue as the US government takes the difference.
If Americans need the product no matter what, then the consumer will have the pay the extra tariff and the seller won’t have to reduce their sale price at all.
TLDR: tariffs can work perfectly well, don’t have to be inflationary, and can encourage domestic investment and growth.
Its really situation specific, and NO nation should ever agree to across the board blind free trade.
Its a lie.
On the plus side, China is already retaliating with tariffs against the US.
China’s Finance Ministry said it would impose levies of 15% for US coal and LNG and 10% for crude oil, farm equipment and some autos. The new tariffs on US exports will start on 10 February, the ministry said.
China’s Commerce Ministry and its Customs Administration said on Tuesday that to “safeguard national security interests” the country is imposing export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items,
In addition, the regulator in China is investigating Google.
That’s better. Let the show begin! I’ve been anxiously waiting.
I am very disappointed that Trump backed down so easily. I was looking forward to his tariffs being applied to Canada and Mexico. It is a great experiment that will show us all if tariffs will do everything Trump said they would; make America rich, pay down the debt, allow us to eliminate income taxes, bring back jobs, lower prices and so on.
Maybe in the next month he will grow a spine and apply those tariffs. I want to watch how this show plays out. Sadly, Act 1 was a dud.
The tariff isn’t necessarily ‘applied to Mexico or Canada’ at all.
If the product is in demand, you the consumer in American will have to pay the tariff.
The foreign producers don’t ‘pay’ the tariff directly at all.
They just sell their product, and US government ADDS the tariff cost to the selling price. If nothing is adjusted, YOU the consumer will pay it.
IF the foreign company finds that the product won’t be bought at that tariff adjusted price, THEN they may have to lower their selling price so the total (product cost + tariff) remains affordable in the US market.
It does NOT have to hurt foreign producers at ALL!!
I understand. But I want a real world experiment to prove it.
Trump’s supporters believe him when he says that the US will get rich collecting tariffs from foreign countries. I want him to follow through and prove it. But he keeps wimping out.
The tariffs on Canada and Mexico were never about making an experiment about whether tariffs are good or not for the GDP. It was always about the border and nothing else. For China and the EU it’s something else so maybe you will get your wish.
I would agree with this, as the Border is the “Primary Objective” and Trump has made that perfectly clear. Stop illegals, Drugs, Baby smugglers, etc. Take their playground away, for lack of a better term at the moment The Tariffs were meant to be put into place if they didn’t agree to do so, the way I understood it. So the “Pause” is Trumps way of saying: I am not sure that I can trust your results, but in good faith, I will pause, with the knowledge, that they are reminded if this meets my objectives. All of them and they have been laid out on paper and behind closed doors as well, I am sure of that! I think the border being “Actually Closed” will meet the Economic Agenda for Trump, and that will close the door on Mexico and Canada Tariff possibilities.
I would also agree with this: “For China and the EU it’s something else” This is more about “Free & Fair Trade” and that won’t be so easily subdued with a Win/Win like we may have accomplished with Mexico & Canada. A lot more pieces in play, and decision on both sides, that may not be agreeable at the start, but will have to be addressed at some point. Sooner is better than later I suppose. We shall certainly see, but I suspect a much longer fought battle with many gives and takes along the way.
Both issues should be able to be resolved with a clean and clear set of guidelines moving forward.if we can get there, then I think we can ALL come to Agreements IMHO.
P.S. Food may be in play, in some fashion I suspect, but that’s my own gut feeling.
Nonsense. Trump insisted that he would use tariff income to eliminate income taxes, pay down the debt and make us rich again. The border was just an excuse to get around trade agreements with Mexico and Canada. But he wimped out when they threatened to collect retaliatory tariffs from us.
Nonsense. Trump said it was over the border and if the conditions were met he would drop the tariffs. I know it doesn’t fit into you economic worldview but this is not the test for the tariffs. China and the EU is.
He will do the same thing he did with Trump Air, Trump Steaks, Atlantic City, Trump Vodka… I can’t possibly recall all of them from memory.
What has annoyed Canadians through this is the what we would call the extreme level of Tariffs leveled, a 25% Tariff across everything is Extreme. Are there problems at the border? Sure, but keep in mind it goes both ways. US guns illegally flooding into Canada is constant and never ending so Trump shouldn’t be pointing fingers at Canada acting like there’s not a problem on the US side either and Canadians know this but most Americans are clueless to it, they just think it’s a Canadian problem only because Trump says it is.
He is not Diplomatic, he comes in full force with a Tariff club that if enacted would do serious harm to our economy and so many in the US just flipitantly ignore that fact and act like Canada has it coming. As many have said, take away our energy exports and the US than has a Surplus. Thats pretty damn good for a Country that is 1/8 the population of the US. Would Trump like us to stop all oil exports to give the US a Surplus? Of course not, losing a 1/4 of your oil supply would throw the US into a Depression. So stop this extreme Tariff extortion Bull Shit, it’s just pissing us off and not helping solve any real issues that should be solved through grown adult negotiations. BTW, he’s bitching about our Trade deal, HE’S THE ONE THAT NEGOTIATED THAT DEAL BACK IN HIS LAST TERM!!
https://www.wfaa.com/article/news/local/investigates/us-firearms-smuggling-fuels-canada-gun-violence-crisis/287-11ebf9ae-6e11-4557-b6c6-f4902d4c016e
Meanwhile, Elon and crew have taken over the US Treasury payment systems and are getting ready to siphon funds into this “sovereign wealth fund”. Who will control that? What will it invest in? What the heck.
The tariff hoo ha is just a distraction.
Hey Rocky, watch the border while I gut the govt and my base cheers me on:
“Musk and Trump try to move fast and break some things in the federal government”
https://www.cnn.com/2025/02/03/politics/trump-musk-federal-government-what-matters/index.html
Facebook already agreed to block links to NPR and implemented it. More of that is what’s next.
– Trump Blinks
> Not so sure about that?
– This afternoon, the US struck a deal with Canada to pause the tariffs for 30 days.
> A deserved pause, and one that Trump hopes help to close a “Much Bigger Deal”
– President Trump never admits a mistake, but he often changes his mind. That’s the best way to read his decision Monday to pause his 25% tariffs
> Trump despises mistakes, but does admit to them at times. This wasn’t one of them however, as His Tariffs were predicated on something occurring, and She in “Good Faith” supplied just that. They both stood by what they said they would, BUT it’s not over yet, so we shall yet see…
– Mr. Trump claimed victory, as he always does. He pointed to Mexican President Claudia Sheinbaum’s decision to deploy 10,000 National Guard troops to the U.S. Border.
> Trump claimed Victory and rightfully so, as for now Peace and a willingness to talk and negotiate further has been reached. A Clear and Most Certain Victory for Both Sides.
– But there’s much less to this tariff truce than meets the eye.
> Coming from someone who clearly can’t see a Victory when it occurs, Um, No.
– Mr. Trump paused his tariffs against Canada as well after a phone call with Prime Minister Justin Trudeau.
> See Above Mexico Stance, (followed by Canada of course), which was simply mimicked.
– Mr. Trump given how he has boasted that his tariffs are a fool-proof diplomatic weapon against friend or foe. Mr. Trump can’t afford to look like the guy who lost.
> Quite the opposite, and He is often taken out of “Full Context” In the MSM Trump will always lose, until they lose funding.
– Ms. Sheinbaum in particular seems to recognize this, and so far she’s playing her Trump cards with skill.
> Agreed, as they are Measured and Show Seriousness. All Trump is Demanding, quite frankly. After the opposit, can you seriously blame Him? Not too mention He does Have a Mandate to address.
– What Happened?
> America got a Smart Person in Office, for “The Citizens” of America. Trump had what America wanted, and that was a “Very Strong” desire to Make America Great Again (MAGA)! It’s clearly working.
– Kentucky Republican Senator Rand Paul correctly stated: “Taxing trade will mean less trade and higher prices.”
> I believe Him, but is that in full context, specific to what Trump is requesting? I don’t think so, but I may be wrong. In general, and a higher % of situations this is applied to, it may be. This is very specific in many ways and for many strategic reasons, of which many, we are probably not even aware of IMHO.
– The head of the National Association of Manufacturers, Jay Timmons, said it put American jobs at risk. “The ripple effects will be severe.”
> We shall see, but if he is correct, I still don’t see the word: “Severe” coming into play at all.
– She made her point, but did so in a way that allowed Trump (and her) to save face.
> It’s Called: “The Art of The Deal” last I checked…
I wonder how much of a discount US refineries get on Canadian oil and how much of the oil trade impacts the deficit with Canada. The CBC pointed out that ex the trade in oil we have a surplus with Canada. Its only a deficit with oil in the mix. If that is true then the only way to eliminate the deficit with Canada is to get the oil for free. Therefore the only reason to have a trade war with Canada would be so we can annex her.
Hmm… Canada & Greenland? I don’t think so…
Why not just march to Ottawa and take over Canada militarily? That would be far more ego-fluffing for Trump.
Has anyone picked up on whether the Mexican and Canadian responses affect the
“de minimis” package processing change?
Personally I think the tariff cudgel is just a red herring, a negotiating tool, which is really being used as cover for a bit of sleight-of-hand.
The “de minimis” shipment revocation, if it sticks, enables substantially increased border security by allowing Customs to eliminate a main pathway for “legalized smuggling”. Customs says they get about 4 million “de minimis” packages each day. Random sampling of those could be very enlightening.
Hell, most Americans have no idea of what de minimus packages are.
Thanks to Karl Denninger, I now know..
Mish have you ever negotiated a purchase? do you know how to setup a deal? Do you understand that complicated things require steps to accomplish and that nothing happens in a single transaction, it is a sum of the whole.
I know you drive a lot of traffic to your site by having Trump articles, like the general news, there is no topic that drives numbers like Trump.
But I expect a bit more nuance and delving into the details, thats why I come to mishtalk. I like to get your take. I find the idea of deciding the outcome of a system of tariffs and trade deals on one days news to be weak analysis.
just wonder if the notion of traffic is influencing your abilities to reason out the confusing daily news into a coherent analysis. I know its a balancing act, but I treasure getting some intelligent understanding in a world of celebrity news and whats the latest outrage.
Keep up the good work and understand, you haven’t seen the whole movie, just the trailer, there is many more months of trade deals and jockeying to rebalance so many bad deals, so many bad administrations…
Fair question to a small point, and not necessary to ask, if you follow and understand Mish. He is creating this space with facts and opinions for various topics of discussion.
I for one, think He does a great job, and we don’t see eye to eye on various articles of discussions, but enough to discuss and be civil about. Everyone has opinions, and they should be shared!
Thanks Mish!
I as well, thats why I was asking if he jumped the gun with this analysis of the “trade deal” based on one news story.
I read Mish because he makes his own news stories, and because I disagree with a lot of his ideas – I don’t seek out stuff that tells me what I already believe. He doesn’t just take information and bounce it off his loudspeaker. I think he deserves a bit more intellectual respect than you’re offering.
Bingo.
Many of the people that I have encountered that “cannot stand Trump!”, are people that feel overwhelmed and threatened by his sense of self confidence.
And his bragging.
But, if one is secure in themselves and confident in themselves, they do not feel threatened.
Or angry.
They see Trump for what he is, good and bad.
The power is in the THREAT of the tariffs. Once Trump actually pulls the trigger, his fantasy world where he is the infallible genius vaporizes and the reality of the economic and thus political damage begins. He will keep up this dopey-pokey as long as CAN and MEX keep dancing for him. Playground bully rules apply here. Until someday the little kid getting picked on gets the courage to punch the bully in the face.
What you and the WSJ are missing is that he got action from 2 foreign countries in roughly 24 hrs time.
Wasn’t it you (and everyone else on this blog) who chuckled endlessly at the EU taking a decade to do a simple trade treaty with Canada and how paralyzed bureaucracy has become in Western countries?
Well Trump’s decided with this being his 2nd term that he’s not going to wait 6 months to get a reply from Canada and Mexico on the border issues and that reply will inevitably be that they will study the problem and report back and another 6 months (or years) will go by with nothing happening until his term runs out. Instead he slapped tariffs on goods and got immediate action from both countries while highlighting the issue in the press.
You can call it a loss, but I call it a win when you can get legitimate action from countries in 24 hrs. Because it means the next time he wants something from one of them he’s going to ask for it in 24 hrs again because it’s clear THEY CAN deliver on that time frame if they get a little motivation (return of tariffs). It’s carrot and stick politics and good for Trump for getting actual action in a reasonable time frame.
Except as i pointed out in another comment here, Trump got peanuts and he’s now your hero. 10k troops? $1.3b from Canada? Is this all it takes to stop tons of fentanyl and immigrants from coming over?
Behold the savior resolves all problems in 24 hours. I guess Mish can shut down his blog because it’s the new golden age from here on out.
@Mish. Shut her down Mish, we can all go home now, all of our problems are solved!
Um, we have a border too, and it’s our job to keep it closed as well. This was a great deal to put the responsibility back on “Both Sides” as neither were doing there jobs.
But no one here has explained yet what Canada and Mexico need to do. Is that stop the free movement of people? Is it to question the millions of people that cross the border every day?
Do you have any concept of how many people, cars, trains, planes cross the border every single day?
– But no one here has explained yet what Canada and Mexico need to do.
> Close the Border from Mexico To America, for ALL illegal crossings, which if done at anyplace along the border, that’s Not A “Legal Checkpoint” it’s considered Illegal.
– Is that stop the free movement of people?
> Obviously Not.
– Is it to question the millions of people that cross the border every day?
> Absolutely Is!
– Do you have any concept of how many people, cars, trains, planes cross the border every single day?
> Yes I do! “I bet Let’s Less Now” illegally, but lots more eventually done Absolutely Legally, and “That’s The Point”
A Win / Win!!
Maybe Trump premeditated the Blink. Better than a Biden forgetting to even Blink.
I’ve lost some respect for you, Mish, in your constant criticism of everything Trump has done with respect to tariffs. It appears that he has obtained a positive response (for the US ) from Mexico, a response that might save thousands of American lives from fentanyl overdoses. And yet, he’s wrong. Maybe the stock market does have an effect on Trump, but that would only be because our frail economy, wrought by decades of criminally ineffectual leadership, is all about the stock market. If the stock market goes down, the economy goes down. That’s not a great way for a country to run.
Trump cares less about the stock market than people here think. First his wealth is in real estate and secondly his mission as he sees it is not to get the market to new highs but to get the government under control and make main street prosper.
Trump’s real wealth is his family, followed by his experience and understanding of finance, real estate, and the interaction between the rich, the corporations, the media, and the government.
He just received an excellent degree in subterfuge, lawfare and the power of justice and the intelligence agencies, to add to his understanding.
A man like that can build wealth with any method he avails himself of. Think of Scrooge McDuck, but not so fond of swimming in a vault full of silver and gold coins, rather swimming in the sewers of Washington DC, to unclog the plumbing for the citizens.
Canadians are incredibly mad right now. Expect them to curtail purchasing “made in USA” regardless of the last minute about face. Other nations now know they cannot trust deals with the US. US exports will suffer.
Stephen, Canada is a great country, been there many times, but its a small country with a lower standard of living than the USA among other countries.
Canada is our trading partner because of location, language and shared customs and while we used to have a King, you still do.
You are not an independent nation, you are actually a Dominion of the Crown. If I were Canadian, (and I actually looked into the process of becoming one, a long time ago) I would consider the offer of becoming a part of the USA, it would raise your standard of living and you could get a 30 year home mortgage. Canada needs a leader that could Make Canada Great Again.
Such a beautiful country, I weep at your political system, its a burden on people that don’t need that challenge.
In summary, don’t poke the bear, consider becoming a cub, try not to get spun up by your media trying to make you forget about your bad economy by blaming it on Trump and the USA.
Good luck
I am a Canadian and have lived here all my life. I freely acknowledge that the USA has better per capita GDP right now largely due to Canada’s incompetent successive liberal governments. Our bad economy is 100% due to our own bad government. US also has freedom of speech which is eroding in Canada. There are plenty of ways the US is superior. .
However, that is not the whole story.
In Canada low income persons don’t go bankrupt when they need surgery. We don’t have a bloated network of multiple health insurance companies and hospitals with multiple different extortionist price levels. We may have lower standard of living (for some people) but longer life expectancy than the US.
The most offensive thing to us is hearing Americans say we should become or even feel privileged to become the 51st state. The more Americans and Trump repeat this nonsense the harder it will be for Canada to elect a conservative government of its own. Liberals help to associate right wing politicians in Canada as being closer to Trump. The more Trump yaps about taking over Canada the more Canadians of every political persuasion will rally against the US.
And why would Trump supporters want Canada as part of the US? Do you really want to add another California to the US?
Medical assisted suicide accounted for 1 in 20 deaths in Canada last year. Makes health care a lot cheaper if you can talk the patients into offing themselves.
Fair point. But our healthcare was still a lot cheaper before we started killing people.
Please read again what you posted… I think the issues are far, far Greater than you realize…
I’m told Tim Hortons is quite good, and think of the franchise locations in the southern 52 states (greenland and panama, beat Canada in joining the usa)
Strategically it would be very good for a combined nation to own all the land from the north pole to the equator and mutual defense would be much easier, as well we have far more in common than different. Both nations struggled to build a railway from coast to coast. Detroit and Windsor were once great technical and manufacturing capitals, the pride of the world. and just think we could finally get rid of that pesky waterfall on the Niagra River and put in a lock or something to smooth things out a bit.
Canada stopped using the word Dominion decades ago. You might recall that Britain’s former Prime Minister Tony Blair played the role of lap dog to President Bush (43). Blair got Britain into a costly war against Iraq. Canada stayed out of it. A big chunk of the American national debt can be traced to its costly Middle East wars.
Many of my Canadian relatives enjoy a higher standard of living than I do and I am better off than most Americans, judging by the amount of premium surcharges I pay towards my Medicare coverage. The high standard of living of the US (when measured by GNP per capita on a purchasing power parity basis) is distorted by the very high incomes of the people at the top.
Sad yet very predictable, like Chris Cuomo and Jim Acosta and so many others who unwittingly thought because of their self aggrandized opinions, views, and parroting of “data” and “facts” on TV and elsewhere, they found out the painful and embarrassing way that they were replaceable and irrelevant enough to lose too much viewership/readership to stay afloat. Honestly, in the grand scheme of routinely generating high ROI and being on the side of winning on topics and life, making time for this anymore than perhaps 20 minutes a week is a waste unless of course you need online friends(?) to post as is done here or you’ve too much time on your hands and are in need of feeling relevant in a losing, quickly diminishing group of pitifully political people. I liken most of this as grifting off of Trump anyway because if this and most OpEd’sters stop using his name in their headlines, no joke, within 3 months they’ll most likely be seeking employment elsewhere which is where this fellow sure seems to be close to. Oh well. Happy reading I guess. What a hoot!
Politics is entertainment. Colbert had very low ratings and was heading towards losing his show before it became trump-centered.
https://www.mediaite.com/uncategorized/colbert-slips-to-4th-place-in-late-night-race-beaten-by-seth-meyers-who-airs-one-hour-later/
https://www.forbes.com/sites/brettedkins/2017/05/25/colbert-beats-fallon-in-2016-2017-season-ratings-by-focusing-on-donald-trump/
Stock market is black and white. Everything else is gray.
It’s should be when the economy goes down the stock market goes down but what we have is a fake economy with ever increasing debt but the stock market has detached from the fundamentals of the economy, it’s just a casino now. There needs to be a recession and a crash to reset before further progress.
The fentanyl deaths aren’t going to stop until our own people stop acting like stupid crack whores.
Didn’t Trump fix the balance of trade issue in 2020 with the USMCA? Why all the drama now? Is he saying USMCA wasn’t all that great, maybe not all that different from NAFTA?
https://trumpwhitehouse.archives.gov/briefings-statements/president-donald-j-trumps-united-states-mexico-canada-agreement-delivers-historic-win-american-workers/
Read up on loopholes: https://www.atlanticcouncil.org/blogs/new-atlanticist/trump-has-the-advantage-in-upcoming-usmca-trade-talks-heres-how-his-team-can-use-it/
Trump has sent a message to other leaders around the world that he cannot be trusted. We shall see how his hysterics play out over the next 4 years.
I guess he just should have said “Don’t” or spoke about a fictional “Red Line”. That type of “tempered” diplomacy would have the press clapping like trained seals. Whether Trump’s tariffs were a head fake, a trial balloon, a bad idea or whatever, it sure got people talking and making commitments pretty quickly. As for the actual results of whatever you want to call it, I guess we will just give it a few more weeks or months to see if everyone is sincere in their commitments made today. After seeing the real time decay of the last four years, I am willing to wait for a few months before declaring doom or victory.
Promises are being fulfilled quickly.
Anti-trump people are getting whiplash and going into meltdown.
Health alerts have been issued. Be on the lookout for signs and symptoms of severe TDS, which include mass delusion, hysteria, twitching, shaking, trouble breathing, facial tics, blurred speech, anxiety, fainting, uncontrollable weeping and trouble thinking.
https://www.newsbreak.com/thedailybeast-513346/3772687655675-cdc-banned-from-making-crucial-health-alerts-ahead-of-rfk-jr-takeover
Yes, he blinked.
His first 13 days have been chaotic (to say the least).
I’m still waiting for the immigration raids on the big employers of illegals like the meatpacking plants. So far all I hear is crickets.
1) We won’t know the outcome until we see some data at both borders and econ #s.
2) Brinksmanship seems to have motivated some concessions; maybe “journalists” could do their job and compile a list of what these breakthrough agreements include?
3) The logical conclusion is there are multiple goals with this overt threat to include physical and economic security; good signaling for everyone else; status quo of unfair trade and freeloaders is over.
4) No mention of the instantaneous successes bringing hostages home from Venezuela or the abrupt Panama Canal shift away from China?
Wow, look at that. Trump kind of took both sides of the situation, and then, lo and behold, he won! It’s literally the same every time.
There was a Yahoo Finance article in the morning that said the stock-market was about the only thing that could stop Trump. And sure it did.
LOL. So many people just don’t like being told the truth. Well… tough noogies!
Yahoo Finance the Barrons of the short attention span set. I wouldn’t put much stock in Yahoo Finance if you know what I mean (and yes thats a pun, and some good advice)
All that incident showed, was that Mexico has a highly skilled politician for President, and we got a moron.
so you must be Canadian then?
Starting to wish I was 🙂
Did it cause a change in behavior? Yes. Is there a mechanism to determine if the change is lasting or significant enough? Yes. If promises are not kept is there a way to punish the transgression? Yes.
I rest my case.
The outcome is preordained. These Mexican “troop” are the cartel. Mexico is a Narco-Cartel state. None of their negotiations are now, nor ever have been, in good faith.
No. The troops are part of the Mexican Nation Guard who are gendarmes. Gendarmes are a mix between the military and the police. We don’t have them in the US but you find similar organizations in places like France and Italy. Basically they under the orders of the military and have military training but they act as a police force.
They’re Mexican, and Mexico is a cartel-state. The government is cartel, the police are cartel, the military is cartel: none of them offer any kind of credible resistance. To negotiate with Mexico is to negotiate with terrorists and enemies of the American people.
There are three types of gendarmes in Mexico:
Now that the tariff debate is settled, let’s turn our focus back to DOGE and illegal immigration.
Anyone still believe the nonsense that DOGE is useless or that illegal immigrants cannot, will not, should not be deported?
A small percent of them will be deported. But the goal of the capitalists is to drive down the wages of every laborer, whether immigrant or American. That will be, and is being, achieved.
Incorrect. The capitalist imperative is to maximize profits, not to drive down wages of your fellow humans. The more enlightened leaders, who can see nonlinear effects, grow profits by producing increases in general prosperity and goodwill, which then further enhances their businesses. The wanna-be variety, who can only see zero-sum linear outcomes, try to “drive down wages” and squeeze their own employees. We all know examples of both kinds.
One of the ways to increase profits is to drive down the wages. Simple arithmetic.
There are not many “enlightened leaders” around anymore. They are nearly extinct now. The process has taken some 4 to 5 decades but we are there now!
“simple arithmetic” is exactly the problem – it’s assuming a zero-sum, linear outcome environment. The flawed assumption is that “nothing else changes” if “you get less and I get more”. That’s “Mediocristan” thinking, if you’ve read any of Nassim Taleb’s stuff.
A strong organization can and will pay people 20% or more above prevailing wage, and will still outperform the ones who believe that they increase their profits by driving down their workers’ wages.
By paying better wages, the good companies retain the talent and cohesive teamwork that helps give them an edge. Stock options are one way of doing this, but not the only one.
These stronger companies also attract higher caliber workers in the first place.
I’ve worked for some, and I also admire the ones I can see.
It’s all a dog & pony show. Everyone knows about the demographic death spiral now.
https://www.nbcnews.com/politics/rcna186360
The Trump administration aggressively publicized the arrests of more than 8,000 immigrants by federal agents since Inauguration Day, with the promise that those detained would be part of a historic mass deportation.
But NBC News has learned that some have already been released back into the United States on a monitoring program, according to five sources familiar with the operations.
We make fun of our prez because, in a world of fantasy and heroes that we see on TV, he is none of these things. He tries to be, but he just cant help himself. He has gone back on so many decisions (the tariffs were just today’s example) that nothing he says can be taken at even half-face value. Im assuming all his civil service nonsense will be reversed as well when they have no one in the control towers. He is terrified of making the wrong decision and being seen for who he truly is that nothing is black and white but mealy-mouth gray. He will never be held to account and he blames everyone else for everything. He is exactly what they say America is. Lucky, lazy and begging to be replaced.
You left one thing out, he is a reflection of the people that voted for him.
Imagine that.
It may be helpful to look at Trump as an entertainer.
Canada caves
Mexico caves
Columbia caves
Panama caves
Denmark caves
WINNING
Trump gets to do a victory lap for the MAGA crowd, Independents do an eyeroll, and the Demo’s lose their sh!t..winning Trump style..
1% of our fentanyl from Canada. OMG! And that’s really likely what a user is carrying FOR THEMSELVES, NOT DISTRIBUTION.
I’d thought there might be something misplaced, but economic, to Trump’s tariff games. Now the STUPID AS FUCK appeasement over Canada doing ANYTHING OTHER THAN STROKING HIS IGNORANCE HAS ME WONDERING IF HE’S REALLY NOT JUST LIKE Scaramucci claims – Trump is just in ratings mode. “Everything is right out of Central Casting” he says.
Off to the next transactional game for Trump. He’ll bring back tariffs when he wants to
use those ratings.
Trump is to be observed. He looks at the world in a different way. He may simply be throwing mud on a wall to see what will stick.
It is 2 plus weeks. Maybe we give 2 plus months before we comment too deeply.
I was thinking the same thing. This was a trial balloon to see how the market would react if he follows through with tariffs and it reacted badly. But it won’t matter now anyway because as you say, no one on earth can trust this man will keep his word on any trade/tax/tariff/whatever deal. If he has a hissy fit, he can renege.
If I were a multi-national firm, I’d be looking at all my alternative options than doing business with the U.S. at least until Trump is out of office.
“[Trump] certainly failed the mission by backing down”
Lol
I told you: he didn’t blink, he cucked.
The Mexicans were shutting down freeways and attacking cops because they have an allegiance to a foreign power. We’ve lost our sovereignty to them, and are now subject to the whims of that scumbag MexicaNarcoCartel government.
Trump should’ve demanded $1Million for each illegal returned.
“President Trump never admits a mistake, but he often changes his mind. That’s the best way to read his decision Monday to pause his 25% tariffs against Mexico and Canada after minor concessions from each country.”
What a massive pile of bullsh!t.
10K troops from Mexico & $1.3B from Canada are not minor concessions. And this is only a 30-day reprieve. And the bonus is Panama is exiting China’s belt road initiative and has been warned one final time that Trump isn’t bluffing about sending in the US Marine Corp.
And all of this happened in less that 24 hours. Who are these idiots from the WSJ that write this stuff? 5th graders?
“What a massive pile of bullsh!t.”
I thought his TDS was pretty bad, but this borders on complete insanity.
Come on guys, 10k troops and 1.3B is PEANUTS. The DOD budget is $1.5 trillion. Why can’t the greatest military in the world control the borders of it’s own country?
https://www.usaspending.gov/agency/department-of-defense
But if this is all it takes for you to fawn all over Trump, go ahead and fawn.
It was Biden who started disassembling the border fence and selling off the scrap until a judge stopped him. The military can’t control the border if the then-Commander in Chief doesn’t want it controlled. https://www.newsnationnow.com/us-news/immigration/border-coverage/judge-blocks-biden-admin-selling-border-wall-materials/amp/
Whah…whah…whah….Biden did it. Whah….. That’s what you sound like a screaming toddler. Trump was president in 2016, he should have fixed it then but oh well…….whah..whah…whah…..
For all your fan fair, you’re really starting to sound like this President Musk guy that trolls around here on Mishtalk.
Maybe with a little grit the Pentagon might actually pass an audit under Trump, something that hasn’t happened in the seven years that they’ve been legally required to perform one.
Two points that have nothing to do with the question at hand. Trump was president in 2016 but was the border permanently fixed? Obviously not. So whatever imaginary fix you think Trump is accomplishing now, what do you think will happen when he’s out of office?
People will be continued to be allowed in because that’s what the vast majority of businesses want and are allowed to do with impunity.
Just like the problem with fentanyl, it’s a demand issue not a supply issue. No demand, no supply…it’s literally that simple.
addictive drugs, by there nature create their own demand. its a feature, not a bug. if you don’t understand addiction, you don’t really understand the issue, nor the nature of solving the problems.
The border wasn’t fixed, because he never got the required funding to do so, AND YOU / ANYONE KNOW THIS TO BE THE PRIMARY REASON.
As for who comes after Trump, I’m sincerely hopeful that Trump delivers on the majority of his promises, and we do see something of a Golden Age start to take hold. Well, whatever that looks like with what will certainly be $40T in debt by the time he leaves office.
If this happens, then rest assured either Vance or Desantis will ascend to the throne next as opposed to Stephen A. Smith.
“…The cost is a loss of trust…”
This is the most important takeaway in my view. When someone betrays you, trust is generally damaged forever. Even if you begin to trust the transgressor in some instances there’s always that nagging feeling that they will screw you over again. The relationship is forever diminished. This makes any serious dealings damn near impossible.
Of course it would be. You hate everything Trump does or says.
He could cure cancer, and you’d figure out some way to find fault with him.
Lol….your ego is hurt by the words of a stranger. Pathetic. Take down that poster of Fabio with Trump’s head superimposed on it that you’ve been ogling and rejoin reality. Cults don’t typically end well for the members. Free advice.
Trust me, Woodsie, you could never say anything that’s going to bruise my ego.
Fool me once, shame on you, fool me twice, shame on me.
Hmm, this trust thing you speak of, which side blew it first, may I ask? China lost my trust during COVID, if not before. Dictators-for-Life score a 0 on trustworthiness in my book. Canada lost my trust when they threw away principles dating back to the Magna Carta in order to shut down protesting truckers. As for Mexico … the U.S. hasn’t trusted Mexico for 200 years.
My only question is: why didn’t we take measures to establish common sense border policies many years ago?
Fail to see the trust lost in this case. The script has played out before with this president and the general consensus going back to his prior term is that the guy shouldn’t be trusted.
Beyond the current administration, the U.S. has a history of breaking trust and appearing to be self-serving, both in recent history and back to the earliest years of the country.
You had me at “WSJ”.
I agree with the WSJ. But it’s a case of “they all blinked’ with praise to Mexico for allowing Trump to save face.
“What Trump does NOT understand, nor does any of his economic advisors, is that inflation can also be caused by asset shortages or a speculative boom
and currency declines causing inflation. What Trump is going to be slapped in the face with is currency inflation. A number of reasons can cause a decline in a currency.”
https://www.armstrongeconomics.com/world-news/govt-incompetence/tariffs-depression-do-we-just-go-kaput/?
Wasn’t a blink… was a Parkinson’s spasm.