America's Talking - Trade War Fears Ease as Trump Pauses Tariffs After Concessions From Canada, Mexico

Starting point is 00:00:00 Greetings, everyone, and welcome to America in Focus, powered by the Center Square. I'm Dan McAulb, chief content officer at Franklin News Foundation, publisher of the Center Square Newswire Service. It's been another hyperactive week for the administration of President Donald Trump, who started the week, last weekend, actually, announcing new tariffs on imports from Canada, Mexico, and China. But by early in the week, both Canada and Mexico relented on Trump's demands for more border security efforts to slow the flow of fentanyl and other illicit drugs into the U.S. And the president then paused the tariffs for 30 days. Joining me to discuss this is Casey Harper, Washington DGC Bureau Chief for the Center Square.

Starting point is 00:00:40 Casey, the stock market tumbled early Monday after Trump first announced the tariffs, but they have since rebounded after the tariffs on Canada and Mexico were paused because they gave in to Trump's border security demands. Are the president's tough negotiation tactics working? Are they working? Wow. Well, Tom will tell, I mean, I think that, for all the reporting on the stock market and the small wins in negotiations, this is a policy that is so fresh, so new. We haven't really had tariffs like this in over 100 years in the U.S.

Starting point is 00:01:10 So to say that any of these experts really know what is going to happen, it's all speculation. And so I think it's going to take months, you know, we're going to be well into Trump's presidency before we see the full impact of these tariffs, the pros and the cons. And many of the cons have been pointed out by the media by others. And I think there's real reason to be concerned, you know, energy prices, for instance, if we start importing our energy from Canada with tariffs, and they start tariffing us, that could really, that could raise energy prices. That's a real thing. Of course, Trump hopes to offset that with his own domestic drilling. So that's a good example of, you know, will energy prices go up? It's like, well, you have to weigh the tariff against

Starting point is 00:01:52 Trump's own domestic energy policy. You can't just look at the tariffs isolated. And I think that's what everyone's been doing. They say, oh, if this tariff goes through, prices will raise this much, and economic input will be decreased this much. And, you know, maybe that, maybe that's all true, but they're not taking into account the other deals the president's going to be making. And I'm not saying he necessarily, you know, compensate for all these tariffs with his other deals. But if he puts a tariff on one country and then goes and makes a deal with a different country to replace them, well, that changes the calculus. And so I think a lot of these experts have to be a little bit humble and patient with seeing exactly how this is going to play out.

Starting point is 00:02:31 What else is going to go along with these tariff plans? But to your point about the stock market, Dan, there is certainly a lot of uncertainty. And the stock market doesn't like that. We're definitely in the land of uncertainty on these tariffs right now. Agreed. But I think what much of the media ignores when it comes to Trump's tariffs is that it's all part of the negotiation tactic. the art of the deal, right?

Starting point is 00:02:58 He's looking for concessions from these countries. Canada and Mexico, let's just start with, because of the border crisis over the four years of the Biden administration. He's constantly said that Mexico and Canada aren't doing enough to slow the flow of illegal immigration into the United States, to slow the flow of illicit drugs like fentanyl into the United States. He got concessions from the Mexico president, from the Canadian, Prime Minister on border security efforts and the tariffs are paused. Trump is known for his negotiation skills and I think that this is more about getting concessions than it is about placing, you know, 25% tariffs on the U.S.'s neighbors.

Starting point is 00:03:42 Right. I mean, and that certainly could be the case, you know, even in the negotiation, though, I would say there's going to be maybe some periods of time when we do experience those tariffs so Trump can prove he's not bluffing or something. That's something to consider. But with the negotiations, I mean, you're right. I mean, he has gotten these concessions. Now, critics of Trump were quick to point out that, you know, oh, Canada and Mexico, they were already planning to do this. This is a hollow victory. But I didn't really buy that argument because, you know, politicians say a lot of things, but when they actually act is what's important.

Starting point is 00:04:16 And they may have been promising or saying they were going to do these things, the leaders in Canada, Mexico, but with these tariffs forced action, they forced a sense of urgency. And that's been the hallmark of Trump's presidency so far, a sense of urgency. We can't barely keep up with these executive orders and these tariffs and these new actions and appointees and all these things. So there's a lot of things that, you know, people have been talking about should happen, but these tariffs, Dan, to your point, create a sense of urgency and say, no, it's going to happen now, not, you know, over the next six or 12 months. It's going to happen tomorrow, which is a timeline that, you know, I'm here in the DC area. I know how people think. They don't think in terms of days when it comes to policy.

Starting point is 00:04:55 They think in terms of, you know, quarters and years and decades. They think of funding over 10-year time spent. So Trump's able to put this sense of urgency and say, no, this is going to happen today. And I think that's really the strength of the negotiating tactic. These tariffs on China, you reported this week that it also could lead to an end of a tax loop for these Chinese retail outlets, online retail outlets like Sheehan and Timu, who have been able to skirt U.S. import laws and tariffs on those imports because of a loophole in the law. You report on that this week. Tell us a little bit about that.

Starting point is 00:05:33 Right. So while the Mexican and Canadian tariffs were a bit more unconventional and surprising and controversial, the Chinese tariffs were more well received, I think. And it's a very multifaceted issue. But what you're referring to that I reported on is, is that there's been this thing called the de minimis exemption where, you know, Chinese companies were able to ship directly to American consumers packages as long as they were less than $800 in value without really paying, you know, paying taxes on them. And they were also able to avoid a lot of the security screening that larger packages receive. And so because of that, one, they're evading just, I mean, an incredible amount of American taxes.

Starting point is 00:06:14 We're talking hundreds of millions of packages, billions of dollars used to. exemption. And companies like, Shine and Teamu, they, their whole business relies on it, basically. And so it was raising real concerns in addition to the tax concerns about security. And they were able to smuggle a lot of fentanyl, different, you know, nefarious actors. We were able to take advantage of the lower security and smuggle the fentanyl. So these new tariffs apply to that. These tariffs against China close this loophole effectively. So, you know, I think this is one, whereas, you know, Mexico and China, there's a hope that we might have more of an amicable relationship because of their proximity to us.

Starting point is 00:06:54 When it came to being tougher on China, I think Trump's policies are more well received. Thank you for joining us today, Casey. Listeners can keep up with this story and more at thecentersquare.com.

America's Talking - Trade War Fears Ease as Trump Pauses Tariffs After Concessions From Canada, Mexico

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