Trump’s Tariff Wars with Canada and Mexico

Poorly Conceived and Ill Advised

Despite what President Trump says and despite what his spokespersons repeat, American consumers will bear the cost of the tariffs Trump has imposed, and those costs will be considerable. Donald Trump is not a cautious man. He sees himself as a man with swagger… as king of the hill. He seems not to understand, or care, that the hill on which he is determined to stand will, in great measure, consist mainly of the detritus of his ill-advised policies and actions, at least where tariffs are concerned.

So, let’s once again try to fathom why President Trump, and now his press spokesperson, Karoline Leavitt, still insist on trying to convince the American public that foreign exporters will pay the cost of the tariffs he has imposed, rather than American importers and, by extension, American consumers.

Frankly, I don’t think there is a reason why President Trump, or “Tariff Man”, as he likes to refer to himself, has insisted that tariffs are a tax we impose on foreign manufacturers, other than the reality that he doesn’t, or didn’t, understand how tariffs work at all. As for Karoline Leavitt, she has simply repeated what she has heard President Trump say. It is clear Leavitt doesn’t understand tariffs either.

Listen to her, lecturing Associated Press reporter, Josh Boak, after he explained that President Trump’s tariffs were tax hikes on American importers, and, by extension, American consumers who ultimately purchase imported products.

She insisted that he (President Trump) is not implementing tax hikes. “Tariffs are a tax on foreign countries that, again, have been ripping us off. Tariffs are a tax cut for the American people, and the President is a staunch advocate of tax cuts.” Yes, Karoline Leavitt really said that this week. Well, no, Mrs. Leavitt, Tariffs that we impose are not a tax on foreign countries that are ripping us off. And tariffs are certainly not a tax cut for the American people. Tariffs that we impose are taxes on Americans who buy imported products. If anyone is getting ripped off by Trump’s tariffs, it is the American consumer who purchases a product on which Trump has imposed a tariff.

Now, this is serious stuff because tariffs are serious business. It would seem that a requisite for imposing tariffs, or defending them as Karoline Leavitt is now doing, should be, at a minimum, an understanding of what tariffs are and how they work.

AP reporter Josh Boak is, of course, correct. Tariffs are simply taxes imposed on importers, not exporters. When America imposes a tariff on an imported product, Americans pay the cost of that tariff, not foreigners. Karoline Leavitt shouldn’t be judged too harshly for lecturing that tariffs are taxes we impose on foreign manufacturers or exporters of foreign-made products. After all, she was only repeating what she had heard her boss, the President of the United States, say about tariffs. She had every right to assume he knew what he was talking about.

Aside from the spectacle of American officialdom waxing eloquently, but entirely mistakenly, about tariffs, a far greater concern is the spectacle of a wholly ill-advised trade war erupting with our closest trading partners. It is pure foolishness on steroids. The only certainty about this trade war is that it will cost American families a lot of money.

Suppose President Trump continues his trade war with Canada and Mexico. In that case, he will simultaneously exacerbate inflationary pressures in America and probably create a cost-of-living crisis for American families, and for what? Such an artificial spike in prices would have no redeeming value. Yale University’s Budget Lab estimates that the increased tariffs President Trump is threatening would result in a loss of purchasing power for American families of about $1200. That, of course, assumes that such ill-advised tariff warfare doesn’t extend beyond Canada and Mexico.

So far, Trump has imposed massive 25 percent tariffs on nearly all goods our neighbors to the north and south send us, except oil and energy, for which Trump’s tariffs are pegged at 10 percent. Now, the United States needs Canadian petrochemicals because we do not drill enough for what we need to fuel our economy. That means Trump’s tariffs will increase fuel costs in the United States, which Americans will quickly feel at the gas pump in certain sections of the country, such as the Midwest, which traditionally imports considerable oil from Canada. Canadian authorities estimate that Americans in the Midwest could see an immediate hike of as much as 75 cents a gallon at the pump. This isn't very smart. Americans should not be getting hammered because of Trump’s misguided infatuation with tariffs.

President Trump claims his tariffs against Canadian goods are, to a great extent, punitive, citing the flow of dangerous drugs he says enters the United States through Canada. He says, for instance, that fentanyl has been flowing into the United States “at levels never seen before.” He described the amount of fentanyl as massive that comes into our country over the northern border. We can all agree that any level is unacceptable, but the level that comes in through Canada is miniscule, at least when compared with what comes in from Mexico. According to U.S. Customs and Border Patrol, 43 pounds of fentanyl were seized at the Canadian border last year. Now, that’s undoubtedly 43 pounds too much, but, by contrast, ten tons, or about 22,000 pounds, or nearly 97% of all the fentanyl seized, was intercepted at the Mexican border. For at least the last three years, the amount of fentanyl captured coming from Canada has made up less than 1% of all fentanyl seized nationwide by the Border Patrol and the Office of Field Operations.

The Bipartisan Policy Center, a Washington-based nonprofit that fosters bipartisan cooperation in addressing major issues facing the nation, reported in a December 2022 analysis that increasing encounters at the border with Canada, including migrants crossing at legal ports of entry and between those ports, “indicate that migrants are seeking alternative routes to enter the U.S.” But unlike the situation with Mexico, there have not been close to “millions,” as Trump suggested, illegally migrating through Canada, according to Canadian Border Patrol data.

The issues at our borders with Mexico and Canada differ substantially, especially concerning drugs. We are not well served when these issues are comingled for political purposes, especially by the White House.

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