We Didn’t Know Trump Would Screw Up So Soon With His Miscalculated Trade War That Never Was

trump’s trade war backfires

By Mary Jones | Wednesday, February 5, 2025 | 3 min read

In the ever-evolving world of American politics, every administration comes with its own set of economic strategies. Some build on past successes, while others attempt to chart new and sometimes unpredictable courses. When Donald Trump threatened a trade war with Canada and Mexico shortly after his November victory, it was a stark reminder of his long-standing obsession with tariffs. However, the swift retreat that followed exposed the real-world consequences of impulsive economic policy.

For decades, economists and businesses alike have understood that trade wars rarely end well for the country that initiates them. While tariffs can, in theory, be used as a tool to protect domestic industries, they often backfire by increasing inflation and disrupting supply chains. When Trump threatened a 25% tariff hike on goods from Canada and Mexico, concerns mounted over rising prices on everyday essentials, from groceries to consumer electronics.

The timing of his announcement was peculiar. With unemployment at historic lows and inflation relatively under control, there was little economic justification for such drastic measures. Trump cited concerns over drug trafficking as his reasoning—an argument widely dismissed by experts as a political smokescreen rather than a genuine economic strategy.

Trump’s tariff threat was met with immediate resistance from Canada and Mexico, both of whom have long been integral partners in North American trade. Modern supply chains are deeply interconnected, particularly in industries like automobile manufacturing, where components frequently cross borders multiple times before a final product is assembled. Any major disruption would hurt American businesses just as much as it would harm foreign producers.

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Faced with mounting pressure and economic realities that could not be ignored, Trump quickly backed off from his trade war stance. He claimed to have secured minor concessions, but in reality, no substantial changes were made at the tariff level. The retreat underscored a common theme in Trump’s economic approach—bold proclamations followed by quiet reversals when met with resistance.

While Trump’s base has largely embraced his strongman rhetoric on trade, his policies have not always translated into tangible benefits for the average American. Many who voted for him in hopes of economic relief have seen little evidence that tariffs or trade battles will lower their cost of living. In fact, the opposite is often true—tariffs act as an indirect tax on consumers, driving up prices on imported goods.

Internationally, the failed tariff push reinforced the perception that Trump’s approach to global economics was unpredictable and, at times, reckless. Unlike U.S. politicians who may hesitate to challenge the former president’s rhetoric, leaders in Canada and Mexico had no such reservations. Their steadfast resistance forced Trump into a corner, ultimately making him abandon a policy he had championed for decades.

What’s Next?

The question now is whether Trump has learned from this misstep or if his administration will attempt similar strategies in the future. His economic playbook often prioritizes optics over substance, making it difficult to predict his next move. Political pressure, media criticism, and personal ego have historically influenced his decision-making, leaving the door open for another tariff-related confrontation.

Regardless of what comes next, one thing is clear: trade policy is complex, and haphazard attempts to disrupt it carry significant risks. The near miss of a major trade war serves as a reminder that economic decisions cannot be dictated by bluster alone. In a world where international cooperation is key to stability, the U.S. cannot afford to gamble with policies that threaten its own economic interests.

Copyright 2024 FN, NewsRoom.

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