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WASHINGTON—President-elect Donald Trump’s brandishing of tariffs on goods from Canada, Mexico and China marks the passage from one era to another: Partnerships are out, and coercion is in.
Trump is showing his second term will be much like his first, defined by the economic and diplomatic fights he picked with friends as well as foes. His punitive use of tariffs to bend others to his will is a far cry from the pains the Biden administration took to forge agreements and build consensus on policy in Europe and Asia.
The president-elect has long taken strong positions with the goal of cowing negotiating partners. It is part of the playbook he used during his first term to confront Iran’s aggression and North Korea’s nuclear program. In the end, his “maximum pressure” strategy produced mixed results: Iran was strangled financially but continued supporting proxies in the Middle East, and North Korea grew and advanced its nuclear arsenal.
“His whole worldview is maximum pressure, it’s that simple,” said a Trump adviser under consideration for a senior foreign-policy position. “Scare your negotiating partner into thinking you will do what most think is unthinkable.”
Trump on Monday night announced his plans to compel countries to stop the flow of migrants crossing the border illegally and fentanyl entering the U.S., by placing 25% tariffs on Canadian and Mexican goods, and increasing existing duties on Chinese products by 10%. The three governments could “easily solve this long simmering problem,” Trump wrote on Truth Social. “Until such time they do, it is time for them to pay a very big price.”
The moves, if implemented as planned in an Inauguration Day executive order, could upend global trade and raise prices for American consumers, but Trump’s allies say his goal is to gain leverage in negotiations—whether with allies or foes.
“Tariffs on allies are a more benign option than sanctions on adversaries, but both are designed to achieve the same end, which is to increase American negotiating leverage in order to find an agreement that advances American interests,” said Mark Dubowitz, chief executive of the Foundation for Defense of Democracies think tank, who speaks frequently to senior incoming Trump administration officials. “It’s maximum pressure gone global.”
Trump will re-enter the Oval Office with the world far more dangerous than when he was first president. Russia’s invasion of Ukraine and the introduction of North Korean troops complicates efforts to negotiate an end to the war. In the Middle East, Israel’s retaliation for the Oct. 7 attack by Hamas has seen tens of thousands of Palestinians killed and most of Gaza’s more than two million people have been displaced. Iran, which has been engaged in a cycle of escalating attacks with Israel, has moved closer to obtaining the weapons-grade fuel needed for a nuclear weapon.
Members of Trump’s team are saying his strength is already having global effects, with incoming national security adviser Mike Waltz giving his boss credit for the Biden administration-brokered cease-fire between Israel and Hezbollah.
“Everyone is coming to the table because of President Trump,” he posted to X. “His resounding victory sent a clear message to the rest of the world that chaos won’t be tolerated.”
Under most administrations, major foreign-policy decisions out of the White House usually emerge after reviews featuring senior aides, counselors, lawmakers and even allies. Trump turned the process on its head in his first term. He often announced policies before formal considerations had taken place, in some cases sidestepping Congress and leading to a scramble within his team to implement the directive.
A week into his first term, Trump signed an executive order to ban citizens of seven Muslim-majority countries from entry into the U.S. for 90 days, even though senior officials knew the document hadn’t been reviewed by government lawyers.
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In this case, Trump is still weeks from taking office, and his transition team has yet to complete the executive order he would use to impose the tariffs.
Tirades against U.S. trade practices were a common theme of Trump’s 2016 campaign. He said he would renegotiate the North American Free Trade Agreement, a free-trade pact among the U.S., Canada and Mexico, threatening to walk away from it. He eventually signed onto a new deal, the U.S.-Mexico-Canada Agreement, which went into force in 2020 and saw improvements for American workers as well as expanded trade, according to the U.S. Trade Representative’s office.
In 2018, Trump slammed the European Union with 25% and 10% penalties on steel and aluminum, respectively, prompting the bloc to hit back, imposing import taxes on Kentucky bourbon—a key industry for then Senate Majority Leader Mitch McConnell (R., Ky.). Trump also had threatened to impose 20% tariffs and cars and car parts from Europe, but the U.S. and EU reached an accord to avoid further escalation.
Trump’s biggest trade target, however, was China. He blamed Beijing for stealing U.S. intellectual property and dumping cheap goods into the American market. In 2018, Trump placed a 10% tariff on Chinese aluminum, 30% taxes on solar panels and washing machines, and 25% duties on all other products from the country. It was a major shot in a trade war that would dominate Trump’s first term, and which the Biden administration largely continued.
A 2020 analysis by the Brookings Institution found that Trump’s steel tariffs “appear to have helped create several thousand jobs in the steel industry,” while duties on washing-machine duties “associated” with 1,800 jobs across three factories in the U.S. But the analysis cautioned that any employment gains created by Trump’s tariffs by reducing imports were offset by losses in the drop in U.S. exports.
A 2019 Federal Reserve Board paper also found that “tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices.”
Trump’s desire to continue a tariff-heavy approach during his second presidency has already sparked a backlash from Mexico.
“For every tariff, there will be a response in kind, until we put at risk our shared enterprises,” Mexican President Claudia Sheinbaum wrote in a letter to Trump that she read aloud Tuesday.
Sheinbaum is facing a similar predicament as her predecessor, Andrés Manuel López Obrador. Trump threatened tariffs of 25% on imports of all goods from Mexico unless it stopped illegal migration into the U.S., prompting López Obrador to send Mexico’s national guard to the U.S.-Mexico border. Trump later dropped his tariff threat.
“U.S. leadership works best when we find ways to push countries to do what’s in our interest that are also in theirs,” said Heather Hurlburt, chief of staff in the U.S. Trade Representative’s office during the Biden administration. The proposed tariffs “on a major trading partner are in no one’s interest—not consumers, not workers, and not the Mexicans who we want to work in legitimate industries and find their futures in Mexico.”
Canadian Prime Minister Justin Trudeau said Tuesday that he had held a “good call” Monday night with Trump about the tariffs. “We obviously talked about laying out the facts, talking about how the intense and effective connections between our two countries flow back and forth,” he said, a reference to the roughly $400 billion of Canadian exports to the U.S. a year.
Meanwhile Liu Pengyu of China’s embassy in Washington warned this week that neither side “will win a trade war or a tariff war.”
European allies, already nervous about Trump’s promises of tariffs on their goods, took his latest move as a sign that they soon could be locked in a trade war with the U.S. The EU already has discussed countermeasures, including targeting products made in Trump-friendly districts to cause him political distress.
The warnings and signals from abroad might not persuade Trump and his team to back down, however, especially on an issue so central to the president-elect’s political career.
Vivian Salama and Santiago Perez contributed to this article.
The Trump Transition
Insights on the outlook for business, policy and the economy under Trump, selected by the editors
Write to Alexander Ward at alex.ward@wsj.com
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Appeared in the November 27, 2024, print edition as 'Friends, Foes in Trump’s Sights'.
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