Trump tariffs: Who is winning the cold war on trade - US, Mexico or Canada?
2025-02-04
Category: news

President Donald Trump has suspended for 30 days the hefty tariffs on Mexico and Canada that he threatened after last-minute negotiations with the two US neighbours.He can point to concessions on border and crime enforcement as a victory. But Canada's Justin Trudeau and Mexico's Claudia Sheinbaum  also can claim political wins.A trade war that would send economic shockwaves through North America and beyond is on hold - for now. So who blinked first and what happens next?
Trump brinkmanship appears to pay off
By Courtney Subramanian, BBC News, Washington DCPresident Trump's high-stakes confrontation with the United States' closest trading partners appears to have paid off, with both Mexico and Canada agreeing to stricter border security and taking bigger steps to address fentanyl trafficking.The strategy to leverage the US economy to force concessions from other countries notches a win for Trump's "America first" agenda, allowing him to follow through on core domestic issues without American consumers feeling the sting of the economic consequences of a continental trade war.His tariff playbook is hardly new. Trump's tariffs on steel and aluminium during his first term prompted backlash from Mexico, Canada and the European Union, but economists say those measures were more limited in scope. This time, Trump has promised sweeping tariffs on goods from Mexico and Canada, and China, which is still set to see a 10% tariff increase on goods starting at midnight on Tuesday.But it remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up. That uncertainly stirs fears that could see businesses reducing their reliance on American markets, holding off on investing in building new factories or hiring workers until the trade stand-off becomes more clear.
Lame-duck Trudeau pulls off a trade truce
By Jessica Murphy, BBC News, TorontoThat was not a January Arctic blast from the north - it was a widespread sigh of relief from Canadian politicians and business leaders at the 30-day pause on US tariffs.While the threat of tariffs remains, Canadian Prime Minister Justin Trudeau can claim a political win: a temporary truce in what was shaping up to be a devastating trade war.Canadian politicians have been scrambling to figure out what exactly would satisfy Trump - a situation not helped by Canada's domestic politics, with Trudeau wrapping up his last weeks in power as a lame-duck prime minister.The border security measures announced on Monday aren't all new.In December, Canada announced C$1.3bn ($900m; £700m) in measures that included efforts to disrupt the fentanyl trade, new tools for law enforcement and enhanced co-ordination with US law enforcement.Canadian surveillance drones and two Black Hawk helicopters recently began patrolling the boundary between the two countries.Officials have cited those efforts for weeks to show they are taking Trump's border concerns seriously.A new element appears to be the appointment of a "fentanyl tsar" and a C$200m intelligence directive to fight organised crime and fentanyl.One question that remains is what this means for the future of the Canada-US relationship. The partnership between the allies has been deeply shaken by Trump's economic threats.
Mexico's Sheinbaum buys herself time
By Will Grant, BBC Central America and Cuba Correspondent, Mexico CityThroughout this trade crisis, President Claudia Sheinbaum has called for "cool heads" and "calm". Even on Friday, she said she was confident of a last-minute reprieve from the 25% tariffs on Mexican goods. And so it proved, following an early morning telephone call with President Trump.Announcing the agreement soon after, she could barely wipe the smile from her face and her supporters have heralded what they see as a masterclass in how to negotiate with Donald Trump. Yes, she agreed to send National Guard troops to the border to focus on fentanyl-smuggling, but crucially she secured what she wanted from Trump, too.As well as the obvious – a pause on tariffs – she also got Trump to "promise" the US would do more to tackle the traffic of high-powered weapons from the US into Mexico, to prevent them from ending up in the arms of cartel gunmen.But she also bought herself another vital commodity: time.  She now has several weeks to build on the points agreed in that phone call and turn the temporary hold on tariffs into a permanent one.The expectation is that now Secretary of State Marco Rubio will visit Mexico soon to discuss these matters and a joint group on fentanyl will be established with Mexican and US health and security officials. If in fact Sheinbaum does manage to prevent further trade hostilities, it will go down as the first significant victory of her new government, having only been office since October. And may set the tone for future interactions with President Trump and his administration.
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