Reciprocal trade relations are only one piece of President Trump’s new tariff policy, which starts tomorrow, Wednesday, April 2, 2025. The other piece is the idea that tariffs can be used as a diplomatic tool to prompt other countries to act on non-trade related matters – such as border control and illegal drug smuggling – and those remain the subject of ongoing negotiations.
Mexico, Canada and China are America’s three largest trading partners, accounting for about $1.4 trillion worth of US imports annually. For context, US gross domestic product clocked in at $27.36 trillion in 2023, according to the US Bureau of Economic Analysis, as reported by the New York Post.
The old Republican Party always claimed to be in favor of “free trade.” However, their idea of “free trade” was to allow foreign competitors to undercut American producers in our domestic markets, while doing nothing when our trading “partners” imposed tariffs on our exports or even excluded American goods from their domestic markets.
The Democrat half of the DC Uniparty was happy to contribute to the destruction of our domestic manufacturing by enacting ever-increasing layers of regulations on American producers – environmental, labor, even DEI, while ignoring the labor and environmental practices of our competitors.
The result was that over many years we “off shored” many industries, and the jobs that went with them, in the name of tough environmental and labor regulations.
So, when Trump, during his June 28, 2016, remarks in Monessen, Pennsylvania, called the loss of American heavy manufacturing and the creation of the “Rust Belt” a politician-made disaster he was right on the money.
As Trump put it back in 2016:
We allowed foreign countries to subsidize their goods, devalue their currencies, violate their agreements and cheat in every way imaginable, and our politicians did nothing about it. Trillions of our dollars and millions of our jobs flowed overseas as a result. I have visited cities and towns across this country where one-third or even half of manufacturing jobs have been wiped out in the last 20 years. Today, we import nearly $800 billion more in goods than we export. We can’t continue to do that. This is not some natural disaster, it’s a political and politician-made disaster.
In that analysis Donald Trump was correct, and his prescription of tariffs as a way to equalize costs is exactly what our trading “partners” have done for years.
Michael Pettis, who is a senior associate at the Carnegie Endowment for International Peace, has made a splash with a contrarian, historicized observation about tariffs that goes against the general opposition to tariffs voiced by most economists. Even more notable, he has had some nice things to say about Trump’s plans for aggressive trade reforms. “Done under current circumstances,” Pettis wrote, “tariffs could increase employment and wages in the United States, raising living standards and growing the economy.”
However, there’s another angle to President Trump’s tariff policies that has gotten lost in all the media whining over the potential price increases for Mexican avocados, Canadian whiskey and Chinese Christmas tchotchkes.
And that’s the idea that tariffs can be used as a diplomatic tool to prompt other countries to act on non-trade related matters – such as border control and illegal drug exports.
In that regard the Red Chinese were the first ones to get the message, but so far, they don’t seem to be inclined to act on it.
Indeed, Communist China’s foreign ministry said, “Fentanyl is America’s problem… The Chinese side has carried out extensive anti-narcotics cooperation with the United States and achieved remarkable results.”
While the Red Chinese have refused to take responsibility for pushing fentanyl on Americans, the Canadian and Mexican governments have taken some steps to address the non-trade related aspects of President Trump’s tariff policies.
On March 7, Border Patrol Chief Michael Banks told FOX News: “I do believe we are seeing Mexico put a lot of their troops on our southern border to prevent the illegal immigration from even making it to the border to attempt to cross.”
And in a reversal of “hugs not bullets” policy toward cartels, Mexico is preparing to target fentanyl labs with U.S. support.
Canada is reinforcing the border with new choppers, technology and personnel, enhanced coordination with American partners, and increased resources to stop the flow of fentanyl.
Nearly 10,000 frontline personnel are and will be working on protecting the border.
In addition, Canada is making new commitments to appoint a Fentanyl Czar, list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.
And before leaving office, former Prime Minister Trudeau announced he signed a new intelligence directive on organized crime and fentanyl and would back it with a new $200 million commitment.
However, it remains to be seen if these efforts are enough to remove the non-economic tariffs President Trump has imposed on Canada and Mexico.
-
2024 Election
-
Trump executive orders
-
Trump tariffs
-
Liberation Day
-
American trade
-
Mexico
-
Canada
-
China
-
American manufacturing
-
free trade
-
Border control
-
drug trade
-
fentanyl
