President Donald Trump announced 25% tariffs on Canada and Mexico over the weekend, but reached agreements with both countries on drug trafficking and border security measures before the tariffs took effect. Mexico agreed to deploy 10,000 national guard officers to the U.S. border, while Canada promised to beef up border enforcement and appoint a new “fentanyl czar.” In return, Trump suspended the tariffs for 30 days. While Trump praised these agreements, experts noted that some of the measures were not as substantial as they were made out to be.
Some concerns were raised about the troop deployment from Mexico, as it was unclear whether the soldiers were new recruits or just being shifted from other areas. Additionally, the reductions in migrant and drug flows at the southern border were already trending down before Trump took office. Despite this, Trump is focused on headlines and social media, rather than quantitative data.
The Trump administration faced criticism from U.S. manufacturers, especially automakers, over the tariffs. Trump’s National Economic Council director assured that the negotiations were about a “drug war,” not a “trade war.” Canada also agreed to take a more aggressive stance on border security and drug interdiction, although comparisons between the Canadian and Mexican borders are complicated due to differing drug flow levels.
It is believed that Trump’s strategy is to keep friends and foes off balance through uncertainty in negotiations. Experts warn that the risks of higher tariffs may have increased due to this approach. Despite brokering truces with Canada and Mexico, Trump has faced criticism for creating economic policy uncertainty that could have negative impacts on investors and economists.
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