November 26, 2024
Today presented a good example of the difference between governance by social media and governance by policy.
Although incoming presidents traditionally stay out of the way of the administration currently in office, last night, Trump announced on his social media site that he intends to impose a 25% tariff on all products coming into the U.S. from Mexico and Canada “until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump claimed that they could solve the problem “easily” and that until they do, “it is time for them to pay a very big price!”
In a separate post, he held China to account for fentanyl and said he would impose a 10% tariff on all Chinese products on top of the tariffs already levied on those goods. “Thank you for your attention to this matter,” he added.
In fact, since 2023 there has been a drop of 14.5% in deaths from drug overdose, the first such decrease since the epidemic began, and border patrol apprehensions of people crossing the southern border illegally have fallen to the lowest number since August 2020, in the midst of the pandemic. In any case, a study by the libertarian Cato Institute shows that from 2019 to 2024, more than 80% of the people caught with fentanyl at ports of entry—where the vast majority of fentanyl is seized—were U.S. citizens.
Very few undocumented immigrants and very little illegal fentanyl come into the U.S. from Canada.
Washington Post economics reporter Catherine Rampell noted that Mexico and Canada are the biggest trading partners of the United States. Mexico sends cars, machinery, electrical equipment, and beer to the U.S., along with about $19 billion worth of fruits and vegetables. About half of U.S. fresh fruit imports come from Mexico, including about two thirds of our fresh tomatoes and about 90% of our avocados.
Transferring that production to the U.S. would be difficult, especially since about half of the 2 million agricultural workers in the U.S. are undocumented and Trump has vowed to deport them all. Rampell points out as well that Project 2025 calls for getting rid of the visa system that gives legal status to agricultural workers. U.S. farm industry groups have asked Trump to spare the agricultural sector, which contributed about $1.5 trillion to the U.S. gross domestic product in 2023, from his mass deportations.
Canada exports a wide range of products to the U.S., including significant amounts of oil. Rampell quotes GasBuddy’s head of petroleum analysis, Patrick De Haan, as saying that a 25% tax on Canadian crude oil would increase gas prices in the Midwest and the Rockies by 25 cents to 75 cents a gallon, costing U.S. consumers about $6 billion to $10 billion more per year.
Canada is also the source of about a quarter of the lumber builders use in the U.S., as well as other home building materials. Tariffs would raise prices there, too, while construction is another industry that will be crushed by Trump’s threatened deportations. According to NPR’s Julian Aguilar, in 2022, nearly 60% of the more than half a million construction workers in Texas were undocumented.
Construction company officials are begging Trump to leave their workers alone. Deporting them “would devastate our industry, we wouldn’t finish our highways, we wouldn’t finish our schools,” the chief executive officer of a major Houston-based construction company told Aguilar. “Housing would disappear. I think they’d lose half their labor.”
Former trade negotiator under George W. Bush John Veroneau said Trump’s plans would violate U.S. trade agreements, including the United States–Mexico–Canada Agreement (USMCA) that replaced the 1994 North American Free Trade Agreement that Trump killed. The USMCA was negotiated during Trump’s own first term, and although it was based on NAFTA, he praised it as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It’s the best agreement we’ve ever made.”
Trump apologists immediately began to assure investors that he really didn’t mean it. Hedge fund manager Bill Ackman posted that Trump wouldn’t impose the tariffs if “Mexico and Canada stop the flow of illegal immigrants and fentanyl into the U.S.” Trump’s threat simply meant that Trump “is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America,” Ackman wrote.
Iowa Republican lawmaker Senator Chuck Grassley, who represents a farm state that was badly burned by Trump’s tariffs in his first term, told reporters that he sees the tariff threats as a “negotiating tool.”
Foreign leaders had no choice but to respond. Mexican president Claudia Sheinbaum issued an open letter to Trump pointing out that Mexico has developed a comprehensive immigration system that has reduced border encounters by 75% since December 2023, and that the U.S. CBP One program has ended the “caravans” he talks about. She noted that it is imperative for the U.S. and Mexico jointly to “arrive at another model of labor mobility that is necessary for your country and to address the causes that lead families to leave their places of origin out of necessity.”
She noted that the fentanyl problem in the U.S. is a public health problem and that Mexican authorities have this year “seized tons of different types of drugs, 10,340 weapons, and arrested 15,640 people for violence related to drug trafficking,” and added that “70% of the illegal weapons seized from criminals in Mexico come from your country.” She also suggested that Mexico would retaliate with tariffs of its own if the U.S. imposed tariffs on Mexico.
Canadian prime minister Justin Trudeau did not go that far but talked to Trump shortly after the social media post. The U.S. is Canada’s biggest trading partner, and a 25% tariff would devastate its economy. The premier of Alberta, Danielle Smith, seemed to try to keep her province’s oil out of the line of fire by agreeing with Trump that the Canadian government should work with him and adding, “The vast majority of Alberta’s energy exports to the US are delivered through secure and safe pipelines which do not in any way contribute to these illegal activities at the border.”
Trudeau has called an emergency meeting with Canada’s provincial premiers tomorrow to discuss the threat.
Spokesperson for the Chinese embassy in Washington Liu Pengyu simply said: “No one will win a trade war or a tariff war” and “the idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality.”
In contrast to Trump’s sudden social media posts that threaten global trade and caused a frenzy today, President Joe Biden this evening announced that, after months of negotiations, Israel and Lebanon have agreed to a ceasefire brokered by the U.S. and France, to take effect at 4:00 a.m. local time on Wednesday. “This is designed to be a permanent cessation of hostilities,” Biden said.
Lebanon’s Iran-backed Hezbollah attacked Israel shortly after Hamas’s attack of October 7, 2023. Fighting on the border between Israel and Lebanon has turned 300,000 Lebanese people and 70,000 Israelis into refugees, with Israel bombing southern Lebanon to destroy Hezbollah’s tunnel system and killing its leaders. According to the Lebanese Ministry of Public Health, Israeli attacks have killed more than 3,000 people and injured more than 13,000, while CBS News reports that about 90 Israeli soldiers and nearly 50 Israeli civilians have been killed in the fighting. Under the agreement, Israel’s forces currently occupying southern Lebanon will withdraw over the next 60 days as Lebanon’s army moves in. Hezbollah will be kept from rebuilding.
According to Laura Rozen in her newsletter Diplomatic, before the agreement went into effect, Israel increased its airstrikes in Beirut and Tyre.
When he announced the deal, Biden pushed again for a ceasefire in Gaza, whose people, he said, “have been through hell. Their…world is absolutely shattered.” Biden called again for Hamas to release the more than 100 hostages it still holds and to negotiate a ceasefire. Biden said the U.S. will “make another push with Turkey, Egypt, Qatar, Israel, and others to achieve a ceasefire in Gaza with the hostages released and the end to the war without Hamas in power.”
Today’s announcement, Biden said, brings closer the realization of his vision for a peaceful Middle East where both Israel and a Palestinian state are established and recognized, a plan he tried to push before October 7 by linking Saudi Arabia’s normalization of relations with Israel to a Palestinian state. Biden has argued that such a deal is key to Israel’s long-term security, and today he pressed Israel to “be bold in turning tactical gains against Iran and its proxies into a coherent strategy that secures Israel’s long-term…safety and advances a broader peace and prosperity in the region.”
“I believe this agenda remains possible,” Biden said. “And in my remaining time in office, I will work tirelessly to advance this vision of—for an integrated, secure, and prosperous region, all of which…strengthens America’s national security.”
“Today’s announcement is a critical step in advancing that vision,” Biden said. “It reminds us that peace is possible.”
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Notes:
https://www.cato.org/blog/us-citizens-were-802-crossers-fentanyl-ports-entry-2019-2024
https://www.npr.org/2024/09/18/nx-s1-5107417/overdose-fatal-fentanyl-death-opioid
https://www.theguardian.com/us-news/2024/nov/26/trudeau-canada-trump-tariff
https://www.cbsnews.com/news/u-s-mexico-border-migrant-crossings-reach-new-biden-era-low/
https://www.washingtonpost.com/opinions/2024/11/26/mexico-canada-tariffs-trump-economy/
https://www.washingtonpost.com/business/2024/11/25/trump-tariffs-china-mexico-canada-percent/
https://apnews.com/article/mexico-tariffs-trump-retaliate-sheinbaum-fac0b0c6ee8c425a928418de7332b74a
https://www.theguardian.com/world/2024/nov/26/mexico-trump-tariffs
https://www.usatoday.com/story/news/world/2024/11/26/trump-tariffs-china-mexico-canada/76584142007/
https://www.axios.com/2024/11/26/ozempic-medicare-medicaid-weight-loss-drugs
https://www.cbsnews.com/news/israel-strike-lebanese-soldier-hezbollah-rockets/
https://www.nytimes.com/live/2024/11/26/world/israel-hezbollah-lebanon-cease-fire
Bluesky:
atrupar.com/post/3lbspjei7lc2m
meidastouch.bsky.social/post/3lbsqhgfmhk2i
It’s infuriating that the president elect has zero knowledge or wisdom of approaching our global economy or foreign relation’s. It’s time for the democrats to step up, not step aside!
Trump's promise of new tariffs on Mexico, Canada, and China ignores a simple truth: other countries don't pay tariffs--we do. Tariffs are taxes on imports, and the costs get passed to American consumers through higher prices. History offers a clear warning, vividly captured in these Gilded Age cartoons, about who really pays for tariffs--and who profits. https://forgottenfiles.substack.com/p/the-hidden-cost-of-tariffs