Trump Tariffs, Between Bullying, Populism, and Negotiation

The world is still reeling from the impact of import tariffs imposed by United States President Donald Trump. An interesting aspect of the tariff imposition during Trump's second term is that the targeted countries have risen to retaliate by imposing counter-tariffs on imports from the US. The tariff war has led to bilateral negotiations, in line with Trump's stance of not trusting multilateralism.

Canadian Prime Minister Justin Trudeau on Monday (February 3, 2025) announced that he is in negotiations with the US Government. One of the conditions requested by Trump, in addition to reducing the trade balance deficit on the US side, is for Canada to tighten surveillance at the border with the US to prevent illegal immigrants from smuggling into the US.

"Canada is allocating 1.3 billion dollars to enhance border surveillance, including aspects of human resources, technology, and operational vehicles. Canada has also appointed a special official to address the issue of fentanyl drugs. Canada and the US will conduct joint raids to eradicate drug cartels," tweeted Trudeau on his X account.

On the same day, Trump announced a 25 percent import tariff for two neighboring countries, namely Canada and Mexico. Despite the fact that the three countries are bound by the North American Free Trade Agreement, instead of being intimidated, Canada and Mexico retaliated and struck back at the US.

As reported by Politico on February 2, 2025, Canada has formulated a response to hit the US where it is sure to hurt. Canada specifically targets the economies of US states that supported Trump's victory in the November 2024 presidential election. For example, Canada imposed a 25 percent import tariff on whiskey and bourbon products from the State of Kentucky. Likewise, in the State of Florida, Canada hit their citrus exports with tariffs.

At that time, Canada targeted tariff increases on imports from the US totaling 155 billion Canadian dollars. The first package of tariff increases was on commodities worth 30 billion Canadian dollars. In the second phase, the remaining commodities worth 125 billion Canadian dollars would be subjected to tariffs. Trudeau even urged Canadian citizens to boycott US products and buy domestic products.

"All this time, Canada and the US have always stood shoulder to shoulder in both hardship and joy, from the landing on Normandy Beach during World War II to the tragedy of September 11, 2001. We do not accept being treated arbitrarily," said Trudeau.

Mexican President Claudia Sheinbaum also did not budge. Although not as frontal as Trudeau, she stated that Mexico had already prepared responses to tariff and non-tariff increases. Sheinbaum and Trump eventually negotiated. One of the measures included increasing security at the US-Mexico border. Mexico sent 1,500 soldiers to the border to prevent the smuggling of illegal immigrants and fentanyl. In the future, there will be 10,000 Mexican troops guarding the border.

From here, it is clear that Trump's goal in using tariffs as a weapon, although in some aspects it backfired. Trump wants to stop the entry of illegal immigrants and fentanyl drugs into the US. Trump blames neighboring countries for the phenomenon of fentanyl addiction and crime rates in the US.

The number one competitor of the US, China, has been subjected to an additional 10 percent tariff. This means that tariffs on imported goods from China now reach 60 percent. Unlike Canada and Mexico, which opted for bilateral resolutions, China chose the multilateral route. Beijing has filed a complaint against the US at the World Trade Organization (WTO).

"Regarding fentanyl, China and the US have conducted many successful smuggling raids. As for people's addiction, that is the US's internal affair," Chinese Foreign Ministry spokesman Mao Ning said.

The attitude of not accepting being treated arbitrarily was expressed by Mark Carney, a figure who is predicted to replace Trudeau to occupy the Canadian prime minister's chair. Carney has experience as governor of Canada's central bank and has faced Trump many times at the G7 and G20 forums.

"Trump thinks that just by showing off the country's power, it can work. For Canada, we can retaliate with tariffs for every dollar. We will not bow to a bully. We cannot be shy in the face of Trump," he told the BBC on February 1, 2025.

The commitment to stand firm against the bully is what the world continues to wait for. Because, in the US, the Republican Party is already controlled by Trump. The minority of Republican members who are critical of the property entrepreneur have been removed. Charlie Sykes, a conservative commentator who is now a critic of Trump, said that the Republican Party has completely surrendered to Trump.

Kevin Cramer, a Republican Senator from North Dakota, said that the majority of Republican politicians do not agree with the tariff increase. The party is capitalist, so maintaining trading partners is a necessity. However, he understands that to continue to dominate US politics, the party must follow the will of the populists.

Regardless of the political elite's policy games, the common people have to bear the consequences. Increasing import tariffs means increasing prices of goods. The US people are already struggling with the bird flu outbreak which has caused egg prices to increase six-fold. If imports increase, life will become even more difficult.

“I have to raise my prices, whether I like it or not. It’s either that or I lose money,” Decorah, Iowa, boutique owner Kelli Winchester told USA Today.

She imports 80 percent of her clothing and accessories from China and 15 percent from Canada. If tariffs go up, not only will her profits be reduced, but she will also have less capital to buy new materials. Of course, Winchester said, she won't be able to pay employees because there's no money for it. (AP)