Things happen quickly in Trump’s America. On Saturday, the US President announced sweeping tariffs on imports from China, Canada and Mexico, in a move that sparked panic among allies as far away as Japan and the EU.
By yesterday afternoon, analysts were predicting that the Canadian and Mexican economies would be plunged into recession as a result of the policy and the expected retaliatory measures. But as markets closed in London and opened in New York, Trump had another update; tariffs on Mexico have been suspended for at least a month after President Sheinbaum agreed to deploy 10,000 Mexican troops to her northern border with the US, tasked – in Trump’s words – with “stopping the flow of fentanyl and illegal migrants into our country.”
The move wasn’t enough to arrest the panic in US other stock markets, but it does serve to highlight just how transactional the new Trump administration is prepared to be. Mexico’s capitulation to Trump’s demands follows a similar deal hammered out with Colombia a week ago, when President Petro declared his country would not accept US flights returning deported migrants. In response, Trump threatened immediate tariffs and within a matter of hours Colombia was sending its own planes to bring the migrants back.
Tariffs averted, Trump victorious. There’s a pattern here, but can Trump’s winning streak last? Well, from his perspective, it appears to be working.
Canada initially retaliated by imposing £90bn worth of its own tariffs on US goods and, for good measure, cancelling orders from US firms – including Elon Musk’s Starlink. But late last night the Canadian government announced that it, too, would be sending thousands of troops to the border as part of a multi-billion dollar effort to prevent the crossing of illegal narcotics, winning their own own reprieve and delaying the tariffs Trump had threatened to impose.
This is politics, but not as we know it.
The EU, meanwhile, is braced for ten per cent tariffs on its exports to America. The stakes are startlingly high. How to describe this dramatic state of affairs? The UK’s new ambassador to Washington, Peter Mandelson, could cook up some diplomatic language, I’m sure, perhaps lamenting the imperfect – even inelegant – nature of tariffs. Others, unencumbered by diplomatic niceties, could call it thuggish, reckless and damaging.
However we choose to define this new reality, whether you welcome or lament it, the truth is that Trump’s second (and final) term in office will not be characterised by half-measures or provocative rhetoric, but by the cold, hard and unforgiving approach of a deal-maker convinced he holds all the cards.