2 weeks Ago
The man who gave us The Art of the Deal seems to have done it again. The US stepped back from a mutally destructive trade war with Canada and Mexico yesterday. All three countries announced a month-long freeze on plans to impose a 25pc tariff on each other’s imports after Donald Trump held separate discussions with President Claudia Sheinbaum of Mexico and Canadian prime minister Justin Trudeau.
The truce came, the US president said, after his counterparts pledged additional cooperation on border security to “stop the flow of fentanyl and illegal migrants”. It looks like another piece of successful brinksmanship from the former Apprentice host, a week after his ultimatum to Colombia over its refusal to accept deportees from the US. The Mexican deal, though, might spare Trump a backlash where it would hurt most.
The secret ingredient in his election victory was eggs. Specifically, the soaring price of eggs as a symbol of inflation under Joe Biden. Mr Trump said as much last month: “I won on groceries.
When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time, and I won an election based on that. We’re going to bring those prices way down.” Many American voters hoping to see a fall in their weekly grocery bill would have been set for disappointment if the Mexican standoff had continued.
Mexico also supplies almost two-thirds of America’s vegetables and just under half of its fruit and nut imports. Whatever happens to the price of eggs, US shoppers could expect to pay more for tomatoes and avocados at least. Mrs Sheinbaum had also been expected to announce import taxes on US bourbon, high-fructose corn syrup, pork and other products that largely come from Trump-supporting states.
Meanwhile, in a statement on X late last night, Canadian prime minister Justin Trudeau said: “Proposed tariffs will be paused for at least 30 days while we work together.” Any trade war could have many victims on all sides, and the EU is in Mr Trump’s sights. He said at the weekend that tariffs on imports from the bloc are imminent.
The reasoning: “They don’t take our cars, they don’t take our farm products, they take almost nothing and we take everything from them.” American tariffs would be disastrous for Ireland. Behind Germany and Italy, we have the EU’s third-biggest trade surplus with the US, much of this in pharmaceuticals.
If Mr Trump is threatening the EU to extract concessions, it’s not entirely clear what those would be. His soreness about the US’s trade deficit with other countries appears genuine, even if the economic rationale behind his response is questionable. Before the talks with Sheinbaum and Trudeau.
the Tax Foundation, a US think-tank, estimated that the Canadian and Mexican tariffs were likely to knock 0.3pc off US GDP and wipe out 286,000 jobs. Another 0.
1pc of GDP would be lost under his 10pc tariff on Chinese goods. Trump said at the weekend that American voters would be willing to feel the pain to secure US national interests but he may not want to put this to such a stringent test. EU leaders will be hoping for a swift climbdown, that the spread of the trade war can at least be contained.
So soon after Covid, the war in Ukraine and the soaring cost of living, Ireland can ill afford another economic shock. Taoiseach Micheál Martin was right yesterday to warn the bloc against making any premature moves..
