by Peter Zeihan on December 5, 2024

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Unlike Trump’s proposed tariffs for China, the tariffs heading for Canada and Mexico can be viewed as leverage (or bargaining chips) to address issues amongst our North American trade partners.

Trump’s goal isn’t to disrupt North American manufacturing, he’s just looking to gain the upper hand for negotiations on things like migration and drug control. But that doesn’t mean these tariffs won’t sting. US citizens should expect to see a nice bump in costs to goods crossing these borders. Trump’s North American tariff strategy is a bit reminiscent of Cold War policies where trade access was tied to concessions.

How are our neighbors going to react? I would expect Mexico to cooperate, especially with their new (and hopefully more pragmatic) President Claudia Sheinbaum at the helm. Relations with Canada could sour as they are resistant to any action that could be perceived as ‘bending the knee’ to the US.

Tomorrow we’ll dive a bit deeper on one of the things Trump is looking to stop…fentanyl.

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YouTube Video Link: https://youtu.be/UrN56pQdAxI

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