The seismic shifts in US trade policy over the past few days likely defy any brief summary, but here’s a try.
On Saturday, Donald Trump announced that the US would impose tariffs of up to 25% on all goods from Canada and Mexico, as well as a blanket 10% additional duty on all imports from China.
The next day, the US president said the European Union would “definitely” face extra levies in the near future, but suggested that the United Kingdom could avoid such penalties (despite being “out of line”).
A flurry of frantic diplomacy led Trump to declare a one-month “pause” on the threatened duties on Canada and Mexico on Monday – just hours before the duties were set to enter into force.
No such last-minute reprieve was granted to Beijing, however, which announced a raft of retaliatory measures on Tuesday, including duties on US energy imports and an antitrust investigation into Google.
Unfortunately, the interpretative ambiguities surrounding these dramatic events are as complex and confusing as the events themselves. Three are especially worth mentioning.
The first is that they provide little insight into how Trump himself regards tariffs – indeed, they suggest that the ‘Tariff Man’ himself lacks any coherent interpretation.
In recent months, analysts have desperately sought to understand whether Trump views tariffs as good economic policy that should be imposed regardless of other countries’ actions, or whether they should instead be wielded merely as a threat to extract political or economic concessions.
Recent events support both views.
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