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Fat old crybaby tRUMP will have a temper tantrum over this one. His own
side has turned on him big time.

Opinion
Review & Outlook

The Dumbest Trade War in History
Trump will impose 25% tariffs on Canada and Mexico for no good reason.
By
The Editorial Board
Jan. 31, 2025 5:41 pm ET

President Trump will fire his first tariff salvo on Saturday against those notorious American adversaries . . . Mexico and Canada. TheyAll get hit
with a 25% border tax, while China, a real adversary, will endure 10%. This reminds us of the old Bernard Lewis joke that itAs risky to be AmericaAs
enemy but it can be fatal to be its friend.
Leaving China aside, Mr. TrumpAs justification for this economic assault on the neighbors makes no sense. White House press secretary Karoline Leavitt says theyAve oenabled illegal drugs to pour into America.o But drugs have flowed into the U.S. for decades, and will continue to do so as long as Americans keep using them. Neither country can stop it.
Drugs may be an excuse since Mr. Trump has made clear he likes tariffs for their own sake. oWe donAt need the products that they have,o Mr. Trump said
on Thursday. oWe have all the oil you need. We have all the trees you need, meaning the lumber.o
Mr. Trump sometimes sounds as if the U.S. shouldnAt import anything at all, that America can be a perfectly closed economy making everything at home.
This is called autarky, and it isnAt the world we live in, or one that we should want to live in, as Mr. Trump may soon find out.
***
Take the U.S. auto industry, which is really a North American industry
because supply chains in the three countries are highly integrated. In 2024 Canada supplied almost 13% of U.S. imports of auto parts and Mexico nearly 42%. Industry experts say a vehicle made on the continent goes back and
forth across borders a half dozen times or more, as companies source components and add value in the most cost-effective ways.
And everyone benefits. The office of the U.S. Trade Representative says
that in 2023 the industry added more than $809 billion to the U.S. economy,
or about 11.2% of total U.S. manufacturing output, supporting o9.7 million direct and indirect U.S. jobs.o In 2022 the U.S. exported $75.4 billion in vehicles and parts to Canada and Mexico. That number jumped 14% in 2023 to $86.2 billion, according to the American Automotive Policy Council.
American car makers would be much less competitive without this trade. Regional integration is now an industry-wide manufacturing strategyualso employed in Japan, Korea and Europeuaimed at using a variety of high-
skilled and low-cost labor markets to source components, software and assembly.
The result has been that U.S. industrial capacity in autos has grown
alongside an increase in imported motor vehicles, engines and parts. From 1995-2019, imports of autos, engines and parts rose 169% while U.S.
industrial capacity in autos, engines and parts rose 71%.
As the Cato InstituteAs Scott Lincicome puts it, the data show that oas imports go up, U.S. production goes up.o Thousands of good-paying auto jobs
in Texas, Ohio, Illinois and Michigan owe their competitiveness to this ecosystem, relying heavily on suppliers in Mexico and Canada.
Tariffs will also cause mayhem in the cross-border trade in farm goods. In fiscal 2024, Mexican food exports made up about 23% of total U.S.
agricultural imports while Canada supplied some 20%. Many top U.S. growers have moved to Mexico because limits on legal immigration have made it hard
to find workers in the U.S. Mexico now supplies 90% of avocados sold in the U.S. Is Mr. Trump now an avocado nationalist?
Then thereAs the prospect of retaliation, which Canada and Mexico have
shown they know how to do for maximum political impact. In 2009 the Obama Administration and Congressional Democrats ended a pilot program that
allowed Mexican long-haul truckers into the U.S. as stipulated in Nafta. Mexico responded with targeted retaliation on 90 U.S. goods to pressure industries in key Congressional districts.
These included California grapes and wine, Oregon Christmas trees and cherries, jams and jellies from Ohio and North Dakota soy. When Mr. Trump imposed steel and aluminum tariffs in 2018, Mexico got results using the
same tactic, putting tariffs on steel, pork products, fresh cheese and bourbon.
Canadian Prime Minister Justin Trudeau has promised to respond to U.S.
tariffs on a dollar-for-dollar basis. Canada could suffer a larger GDP hit since its economy is so much smaller, but American consumers will feel the bite of higher costs for some goods.
***
None of this is supposed to happen under the U.S.-Mexico-Canada trade agreement that Mr. Trump negotiated and signed in his first term. The U.S. willingness to ignore its treaty obligations, even with friends, wonAt make other countries eager to do deals. Maybe Mr. Trump will claim victory and
pull back if he wins some token concessions. But if a North American trade
war persists, it will qualify as one of the dumbest in history.
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